A glance at Five tech-based companies tasting success amid COVID-19

Summary

• The technology sector has played a pivotal role in ensuring that several businesses remain operational (with majority of personnel working from home) during COVID-19 crisis.
• Apple has commenced WWDC 20 on 22 June, wherein it stated that the Company would be utilising its own chips in Macbook (in place of Intel chips used earlier) to provide swifter performance on both laptops and desktops.
• Zoom witnessed more than 354% growth in its users during Q1 FY21 period, when video conferencing came to the rescue of businesses amid lockdown.

COVID-19 pandemic is the most thrilling and major chapter of 2020. This pandemic has shaken the world and has brought unprecedented changes across various sectors such as technology, healthcare, manufacturing and many more.

Australia is on a roller-coaster ride since last six months, witnessing bushfires to the outbreak of coronavirus.

With social distancing as mantra of new normal, technology is playing a pivotal role in tackling this extraordinary situation.

Technology is an integral part of everybody’s life, but on business front, sectors like media, financial services, telecommunication, health, retail, education, etc are reliant on it. In the current scenario, it came to the forefront by offering multiple services such as video chat services, e-retailing, automation of devices, cloud computing, e-gaming, and e-learning.

Did you read; Technology sector could be the best bet at the moment

In a nutshell, with the emergence of a swathe of opportunities, technology companies are reaping the benefits, with an injection of funds.

The technology sector, with a paradigm shift to digital transformation, has precisely kept bleak economies buzzing in a way, which would have been unimaginable in its absence.

Did you read; NASDAQ surged up above 10,000 – Tech stocks setting a new benchmark

Lets us now deep dive and discuss a few tech-based companies:

Apple Inc. (NASDAQ:AAPL) has kicked off its virtual Worldwide Developers Conference on 22 June 2020 (WWDC 20) and there is a lot of buzzing news around the same.

Interestingly, the rumoured breakup of Apple with Intel has finally become a reality. Yes! You heard it right. Apple is transitioning its Macbook with the shift to ARM-based ‘Apple Silicon’ processors. The first Apple silicon based Macbook is expected to be available in the market by the end of 2020.

This transition is noted to deliver industry-leading performance focused on the establishment of a common architecture across all its products, further enhancing the ability of architecture to handle professional-grade apps.

This reshaping process is expected to take over two years. However, the Company will keep on supporting and delivering new editions of macOS (for Intel-based Macs) for years to come.

This big news is followed by several other announcements and upgrades in the WWDC 20 such as App Clips and Widgets, Redesigned Xcode, More Customisable Apps with Mac Catalyst, to name a few.

As on 23 June 2020, Apple’s stock last traded at US$366.53, up 2.13% from its previous close.

The video conferencing app, Zoom Video Communications, Inc. (NASDAQ:ZM) has capitalised well on the massive demand for the app, primarily due to work from home arrangements adopted by companies amid lockdown.

With the outbreak of coronavirus, people across the world started following social distancing norms; from schools to boardroom or cabinet meetings, all were largely dependent on video conferencing app.

Did you watch; Why Zoom suspends activist's account?

Furthermore, the Company witnessed a robust business performance with an impressive surge of over 169% y-o-y in its revenue, during the quarter ended 30 April 2020 (Q1 FY’21). The growth in revenue is bolstered by the addition of new customers and expansion across its existing customer base.

At the end of Q1 FY’21, Zoom noted a whooping jump of over 354% in its customers, as compared with pcp.

Interestingly, some investors accidentally invested in a company named Zoom Technologies, a defunct Chinese wireless communication company instead of Zoom video conferencing app.

Hilarious! Isn’t it?

Before COVID-19 outbreak, Zoom used to mostly trade under US$70, its last traded price was noted at US$66.79 (as on 30 December 2019). However, almost 6 months later, on 23 June 2020, Zoom’s share price has witnessed an increase to US$252.81, moving up by 0.61% from its last close.

Did you read; Zoom in, Efficient Market Hypothesis Debunked by Zoom Confusion

Lately, Robinhood, a commission-free investing app in the US has grasped the attention of a lot of people. The app is in the spotlight all thanks to COVID-19.

Why?

As people are confined to the four walls of their houses, sports, as well as gambling are stranded. People are using this mobile app to trade while following the social distancing norms. The trading was boosted during the pandemic leading to an addition of over 3 million accounts of Robinhood this year. The app was unveiled in 2015 and has above 13 million users.

One might wonder how the Company is earning money. Well, it is earning via charging interest on the money that people keep in their app accounts, or charges for additional trading limits as well.

Currently, this app is only catering to the US market.

On 4 May 2020, the Company injected fund worth US$280 million, leading to valuation of the Company at US$8.3 billion.

On home front, let’s have a look at two companies- APT and Canva.

One of buy now pay later players, Afterpay Limited (ASX:APT) is embracing the increased demand of BNPL solutions.

The post-COVID-19 contactless era has brought digital services to the forefront amid a shift in the payment preferences and marketplace; digital transactions are witnessing higher adoption.

Source: RBA

APT has been in the limelight primarily due to the unfolding of its business across geographies, along with a stream of positive announcements, which ultimately boosts the investor’s confidence.

Have you heard about Clearpay?

Clearpay, part of Afterpay Limited is accessible in the regions like New Zealand, the US, the UK, and Australia. The Company has achieved the mark of above 1 million active consumers in the UK region, as notified on 23 June 2020. Moreover, Clearpay has witnessed app and site visits of more than 3 million in May 2020.

APT has delivered a robust and COVID-19 proof business performance during Q3’20 across various geographies, consequently, it became the apple of BNPL eye.

Moreover, APT has established a strong foothold in the US market with crossing of 5 million active customers in the US and ~9 million people joining the platform.

Source: APT report

Further, on 30 April 2020, Tencent bought five percent stake in APT, giving boost to business prospects of the Company in the areas such as technology and geography expansion.

On 24 June 2020, APT shares were up by 1.386%, trading at AU$59.99 (at AEST 2:02 PM).

Did you read; BNPL Stocks Flying High on ASX; OPY zooms up by ~41%, Z1P surges up by ~20%

A Sydney based start-up, Canva has injected capital of US$60 million in new funding round, and thus the Company now values at US$ 6 billion, as announced on 23 June.

As COVID-19 has unleashed chaos in the economy, Canva reported growth in the users globally, especially as more and more people work from home. Of late, 30 million people are using the platform every month to design content, videos, etc. The Company has created more than three billion designs since its launch.

It is noted that the Company is inaugurating its online Enterprise conference, Elevate 2020 on 29 July 2020.

Canva is also open to more acquisitions in media and editing space to foster its growth internationally.