Today's Must Read
Alphabet (GOOGL) Rides on Diversification; Risks Remain
Zoom (ZM) Rides on Work-From-Home & Online Learning Wave
Monday, November 30, 2020
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Amazon.com, Inc. (AMZN), Alphabet Inc. (GOOGL) and Zoom Video Communications, Inc. (ZM). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Amazon was standout performer even before the pandemic, but the stock has really thrived in the Covid-19 driven locked down environment that significantly accelerated the shift to digital sales. The stock's +70% gain in the year-to-date period aptly describes this backdrop. Additionally, solid Prime momentum owing to ultrafast delivery services and expanding content portfolio remained tailwind. Further, strengthening AWS services and its growing adoption rate contributed well.
However, accelerating coronavirus related expenses remain major concerns. Also, foreign exchange headwinds and rising cloud competition are risks.
Alphabet shares have gained +38.7% over the past one-year period vs. +13% gain for the S&P 500 index, reflecting continued momentum search, cloud and YouTube businesses. The company’s strengthening cloud unit aided substantial revenue growth. Moreover, expanding data centers will continue to bolster its presence in the cloud space. Further, major updates in the search segment are enhancing the search results, which is a major positive.
However, the company’s growing litigation issues and increasing expenses might hurt profitability.
Zoom Video shares have outperformed the Zacks Internet - Software industry in the year-to-date period (+593.1% vs. +100.3%). The Zacks analyst believes that demand for the company’s cloud-native video-first platform is expected to remain solid owing to the work-from-home and online-learning wave. Easy to deploy, use, manage and scalability makes Zoom Video’s software popular among its customers. Expanding clientele is expected to drive top-line growth momentum in the near term. Moreover, the company’s expanding international presence is a key catalyst.
However, acute competition from the likes of Microsoft and Cisco in the video-communication space does not bode well.
Other noteworthy reports we are featuring today include Honeywell International Inc. (HON), Automatic Data Processing, Inc. (ADP) and Moderna, Inc. (MRNA).
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Director of Research
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>