Since the onset of the deadly virus this year, there has been one sector that has performed extremely well, Technology. This is evident from the Technology Select Sector SPDR ETF’s (XLK) 67.3% return since its March low, compared with the S&P 500’s 52.8% gain…
With the uncertainty surrounding the upcoming presidential election, fiscal stimulus talks, and continued increase in coronavirus cases, the market is expected to remain quite volatile this month. Moreover, on October 6th, the House Antitrust Subcommittee issued a report, mentioning the wrongdoing and anticompetitive behavior of Facebook (FB) Alphabet (GOOGL), Amazon.com (AMZN), and Apple (AAPL) in detail. The report is demanding action to change antitrust laws. However, the report failed to lower investor enthusiasm for tech companies.
Keeping that in mind, investment in strong technology companies such as Twitter, Inc. (TWTR), Spotify Technology S.A. Ordinary (SPOT), Twilio Inc. (TWLO), Pinterest, Inc. (PINS) and GrubHub Inc. (GRUB) could add a boost to your portfolio amid the pandemic.
Twitter, Inc. (TWTR)
In recent years, if news triggered billions dollar moves in the stock market, it likely came from the little blue bird. I am talking about TWTR, which operates as a platform for public self-expression and real time conversation in the United States and internationally. It has become even easier to follow a particular stock on Twitter. Although a free platform for the users, its major sources of revenues are advertising and data licensing.
For the fiscal quarter that ended June 30, 2020, the Average Monetizable Daily Active Usage (mDAU) for TWTR grew 34% year-over-year to $186 million. The company’s EPS is expected to increase 184% next year. Also, the market expects TWTR’s revenue to increase 2.4% next quarter and 23.7% in the next year.
The stock has gained 107.2% since hitting its low of $20 in mid-March. TWTR is exploring options on how to make the platform better and how misinformation labels can be more direct and obvious. TWTR should exhibit strength as it nears its next earnings release for the quarter that ended on September 30, 2020.
How does TWTR stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
B for Industry Rank
A for Overall POWR Rating
The stock is also ranked #3 out of 57 stocks in the Internet industry.
Spotify Technology S.A. Ordinary Shares (SPOT)
Founded in 2006, SPOT provides audio streaming services in the United States, the United Kingdom, Luxembourg, and internationally. Although offering free services too, its services are monetized through both premium subscriptions and advertising segments. For the quarter that ended June 30, 2020, SPOT’s total revenue grew 13% year-over-year, while its premium revenue grew 17% year-over-year.
Unlike its competitors, it only monetizes profits from its audio streaming services. At the end of the second quarter, SPOT boasted a monthly active user base of 299 million, which grew 29% year-over-year. It has the highest subscribers in Europe at 39%, followed by North America at 29%.
The stock gained 111.3% since hitting its 52-week low in mid-March. The market expects SPOT’s revenue to increase 20% in the current quarter and 22.4% next year. The company’s EPS is expected to grow 62% next year and at a rate of 167.7% over the next five years. SPOT will post its third quarter 2020 financial results on October 29th. The company has been focusing on exclusive podcasts, which have been quite successful, leaning on influencers like the Obamas and Joe Rogan.
SPOT’s POWR Ratings reflect this promising outlook. It has an overall rating of “Buy” with an “A” for Peer Grade and a “B” for Trade Grade. Among the 11 stocks in the Entertainment-Radio industry, it’s ranked #1.
Twilio Inc. (TWLO)
TWLO provides a cloud communications platform that enables developers to build, scale, and operate communications within software applications through the cloud as a pay-as-you-go service in the United States and internationally. It has democratized communications channels like voice, text, chat, video, and email by virtualizing the world’s communications infrastructure through APIs.
It has grown 253.8% since hitting its 52-week low in mid-March and its shares are expected to continue to skyrocket. Not only has its total revenue grown 46% year-over-year, it also had more than…
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