We pick out five businesses who have not only survived the pandemic but are poised to thrive
Tech stocks have generally retreated in recent months as investors tilt to value over growth – but anyone who turns their back on these stocks is missing out on big potential gains.
Beyond the behemoths like Apple or Amazon, who is rising above the parapet to catch investors’ attention as the western world emerges from extended lockdowns?
Here are five to keep your eye on:
1, Snowflake
Stock price: US$239.93
Snowflake is fast emerging as a leader in the cloud data management space. It was built to process all of a firm's data rapidly and securely in one centralized location. The ecosystem easily enables data analysis, transfers, permission management and more. This means Snowflake is replacing redundant on-premise solutions with a seamless cloud offering.
One of the largest IPOs ever at launch last year, shares surged higher only to retreat 50% off their highs, representing a good time for investors to enter. The business looks solid, with revenues growing more than 100% year over year. The company’s CEO, Frank Slootman is a notable tech player who was previously in charge of ServiceNow.
When more firms set to go back to the office (in some form), Snowflake could be a big winner.
2, ServiceNow
Stock price: US$512.81
One of the software-as-a-service (SaaS) industry's most dynamic companies. The stock was close to $600 in February but has come off those highs slightly.
ServiceNow's bread and butter is IT Service Management, which is a core piece of a modern Fortune 500 company's ability to operate. Development of its platform has been aggressive and it’s also made acquisitions to broaden the base. It estimates revenue will top $10 billion in 2024.
ServiceNow has aggressively built out more product offerings on top of its core platform. It also makes acquisitions to broaden the base as well. The firm sees its revenues topping $10 billion annually in 2024.
Reliable and fast, the company is a quality business that increasingly keeps thing running.
3, Hubspot Inc
Stock price: US$550.40
HubSpot sells cloud-based marketing and sales software to corporate customers, offering various business management solutions. It drives visitors to websites and helps firms convert visitors into leads, turn those leads into customers and make them so happy about it they become promoters of the business.
It serves more than 113,000 customers in over 120 countries. HubSpot reported a net loss of $23.2 million for Q1 2021 but revenue rose 41.4% YOY.
4, Booking Holdings
Stock price: US$2,304.82
Not a cheap stock but one that is poised to be a prime beneficiary of the travel rebound as a leading global online travel agency (OTA) that helps people find discounts on flights, hotels, rental cars, attractions, and restaurant reservations through its various brands, including Booking.com, KAYAK, priceline, agoda, Rentalcars.com and OpenTable.
Its earnings are still in the negative, with a $311 million operating loss last quarter. However, Booking has tons of liquidity, with over $12 billion in cash as of March 31, against a little less than $14 billion in debt. In addition, the company has a $3.1 billion stake in Chinese services super-app Meituan-Dianpeng, $525 million in convertible notes in Chinese OTA Trip.com, $400 million of equity in Didi Chuxing (private), the largest ride-hailing service in China, and another $200 million of preferred shares in Grab, a ride-hailing, food delivery, and payments super-app based in Singapore.
Crucially, travel is beginning to return. Booking has already experienced positive room night booking growth versus the first quarter of 2019. Given this, earnings should surpass 2019 figures in 2022 and beyond, making Booking a reasonably priced way to play the rebound in travel.
5, T-Mobile
Stock price: US$145.17
T-Mobile not only has low prices but is also the leading 5G network. When people were stuck at home, churn in the industry went down as most wireless plan switching still occurs in retail stores.
However, now that vaccinations are taking hold and folks are returning to stores, look for switching to increase, which should benefit share-takers like T-Mobile. The firm also offers good features for international travellers, including free calling in Mexico and Canada, as well as free texting in over 201 countries, which will be a factor when borders reopen.
