Last month saw a historic downturn in the global stock markets, with the coronavirus epidemic becoming a reality, triggering unprecedented uncertainty. But when revenues and growth are at risk today, storm-weathering companies will be in a strong position to grow with existing and new business models. Agility will be key in helping their customers transform as well.
Here are seven companies that have a customer base, balance sheet strength, liquidity and the right products and services to lead the way.
Apple AAPL, one of the first companies to admit coronavirus and its infectious covid-19 disease, was quick to adjust its forecasts for earnings per share and + 5.26% as its stores closed, first in China and then worldwide. Now stores in China have begun to reopen.
Apple is still selling devices online, and yet closed stores are reopening, and you can count on customers to step back in. Despite Apple’s small market share in mobile devices and laptops, the company continues to lead the industry and its customer base is loyal — even if its products are expensive and / or lack 5G features. Most importantly, if social exclusion becomes the new norm, we expect consumer demand for personal devices to increase. I expect Apple to be creative in offering offers such as long-term finance and business plans.
The most innovative mobile chip maker in the US has lost more than a third of its market value in the last two months (down from $ 109.5 billion on January 21 to $ 75 billion today), and Qualcomm Cucam, + 9.35%, is still benefiting from the growth in 5G worldwide.
With Asia coming back online and one of the most aggressive adopters of 5G, Qualcomm’s licensing and chip business is likely to see a surge when 5G networks and device adoption increase as market activity resumes. Mobile device usage will not slow down after this. If anything, it will accelerate, and Qualcomm will see its technology and patents generate revenue from the growing connectivity of our devices.
Wall Street Dear Zoom Video Communications, Inc., has received increasing attention for remote work due to the + 2.20% Corona virus, and Cisco owns one of the world’s leading collaboration platforms, Webbex.
Like other collaboration platforms, Webbex has had a surge in business since the launch of the epidemic-driven sack-to-house initiative around the world, giving it 6.7 billion meeting minutes from March 19 this month. This is two to four times the pre-Coronavirus virus blocks.
Cisco is also diversified, has plenty of tools to support secure remote work, and certainly supports the continued growth of the network and enterprises.
Given that its dividend is now 3.8% secure, this stock may also attract investors looking for stability.
In my 2020 predictions published in MarketWatch, I said that semiconductors are eating the world. While I certainly do not predict a disaster like COVID-19 to stagnate the economy, the growth of edge computing in the data center (processed close to where data is generated) and, of course, devices. But as we recover from this epidemic, Intel’s INDC should see an increase in demand by + 8.35% (and Advanced Micro Devices AMT, + 6.43%), as both companies and schools have access to a global workforce and students learning online with new and improved devices. The same applies to Datacenter and Cloud Compute, both of which rely heavily on Intel chips.
Looking at Intel’s strong balance sheet, it is easy to see that the company’s 12-month cash flow is over $ 33 billion, coupled with its dominant market share in the data center and PCs.
Amazon AMZN, + 3.69% is predominant during this crisis, with a massive increase in online sales, and consumers withdrawing services in the wake of the general militancy of leaving shelter-in-place orders and homes.
Its AWS cloud-computing business – the world’s largest infrastructure by market share – provides some fluctuations in revenues associated with businesses that are considered unimportant or disruptive to businesses such as travel, hospitality and more. Retailers. So I wouldn’t be surprised to see AWS offer its customers some way to postpone cloud credits without breaking contracts.
It is inevitable that some companies will not survive this economic downturn, and this will translate into a long-term success for AWS. The Amazon division generated about $ 10 billion in revenue last quarter, representing only 11% of parental revenues, but two-thirds of its profits. In any case, look beyond that, AWS will continue to shine brightly as it is an important business service. It depends on companies affected by COVID-19 to quickly back up and execute operations.
As data science is at the forefront of the medical and research community’s efforts to understand, control, and improve (and plan for others) treatments and vaccines for this epidemic, artificial intelligence and machine learning will be even greater. Nvidia has a very robust framework for NVIDIA, + 4.73% machine learning, and the company has developed its Paraphrix tool (GPU-Accelerated Genome Sequencing Tool) for 90 days free of biotech and corona virus curve to research organizations, develop therapeutics and / or accelerate vaccines .
At the same time, more and more people are playing video games as their cities are locked up, and sales of services such as Nvidia chips and GeForce Now have increased. According to its last earnings report at the end of January, the company has cash and cash equivalents of more than $ 10.9 billion. This, combined with a very short-term loan, helps the company do well.
Amidst the storm, the company’s earnings report showed its best earnings growth in two years. However, this does not take into account the current quarter and the global impact of coronavirus COVID-19. I expect that the company will see lost or deferred revenue as a result.
On the one hand, about 71% of Oracle’s revenue is recurring, meaning that as long as their customers are in business, the company’s income statement is often in good shape. Considering that Oracle customers make up 97% of the Fortune 500, I expect the company to perform well. Oracle earns 10 times the revenue at the lower end of its regular 9 to 19 times range.