Which Technology Stocks Could Benefit From the Coronavirus Disease COVID-19?

Dear Reader,

I have long said and forecasted technology stocks and especially public US technology stocks are overvalued and basically that global stock markets were overvalued as documented from previous blogposts on this blog. I have long forecasted US markets especially will soon, 2021 or 2022, will correct by circa 30% measured by DJIA and S&P 500 and more than 40% measured by the Nasdaq Composite.

My main argument was overvaluation. Now both the global technology and general stock markets bubbles have pricked. I must admit, I never envisaged the coronavirus disease COVID-19  outbreak shock in particular. I thought some kind of shock will lead the overvaluation on US stock markets especially to reset. But I did not forecast the shock will be virus related.

So which technology stocks could benefit from the coronavirus COVID-19 crisis? Obvious candidates are video streaming companies like Netflix Inc. and Zoom Video Communications Inc. Zoom Video Communications Inc.  is even up more than 70% year to date. Netflix is barely up 1% year to date. But these results compare extremely favorably by the near 30% fall in the major US stock market indices DJIA, S&P 500 and Nasdaq Composite since the beginning of 2020.

Yes. Video streaming companies should fall less than the general market. But video streaming is dependent on bandwidth, internet speed and generally telecommunications infrastructure. Video streaming and working from home could overload the cable networks and calls may surface to shut down video streaming to keep workers being able to work from home. Than Netflix from a stellar performer could be hurt horrendously. 

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Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich