by SignalFactory · September 23, 2020 | 11:07:33 UTC
Nearly 7 million Americans have contracted the dangerous disease, and more than 200,000 have died. Worldwide, those figures stand at 31.4 million and 967,000, respectively. Outbreaks in Europe are forcing government officials to consider new lockdown measures. Health experts in the U.S. are warning of an even higher rate of infections as we approach the winter.
“We’re only seeing the tip of the iceberg,” New York City health official Dr. Syra Madad told CNBC on Tuesday. “We’re only nine months into this pandemic.”
These disturbing trends are driving investors to seek shelter in stay-at-home stocks, of which Zoom is one of the more popular. As a leading provider of cloud-based video communications, Zoom is seeing demand for its services boom during the coronavirus pandemic.
Zoom’s growth has been breathtaking. Its second-quarter revenue surged 355% year over year to $663.5 million as businesses flocked to its platform. Better still, Zoom is becoming more profitable as it scales its operations; its adjusted operating profit rose more than 13-fold, to $277 million.
With the pandemic showing little sign of abating anytime soon, demand for Zoom’s video technology should remain strong in the quarters ahead.
Shares of Zoom Video Communications (NASDAQ: ZM) rose even as the broader market tumbled. Zoom’s stock jumped on news that European coronavirus outbreaks could bring more restrictions, which could lead to more use of Zoom’s video service.
The broader market fell recently as inventors continued to process the news that rising COVID-19 cases across Europe could spur increased restrictions and potential lockdowns. Additionally, many investors are concerned that U.S. lawmakers have failed to agree on more financial assistance for those who have lost their jobs because of the pandemic.
But Zoom’s stock rose today because so-called stay-at-home stocks benefit when there are increased social distancing measures. Zoom’s business has benefited over the past six months as schools, companies, and friends and families have used the company’s video service to communicate with each other.
Zoom’s stock price bump today has added to the company’s 255% gains over the past six months.
Zoom continues to be a bright spot in the stock market and the company could continue to experience share price gains in the coming months. If Europe imposes more lockdowns or even brings back some earlier restrictions, people are going to rely more on video calls to keep in touch once again. Additionally, the U.S. could experience spikes in virus cases as we enter the fall and winter months, which could increase demand for Zoom’s services as well.
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