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Five pandemic proof stocks in 2020 and 2021

Kalila Sangster
·4 min read
Digital generated image of financial line charts falling down because of coronavirus COVID-19 on blue background.
The US stock market as a whole has recovered more swiftly than the UK, according to analysts. Photo: Getty

Zoom (ZM) was the best performing stock of 2020 in the US in a list of the top five pandemic proof stocks, yielding the highest return on investment this year, according to new analysis by financial trading platform Stake.

At the beginning of 2020, Zoom shares stood at around $61.20 (£45.60). This rose to $106 as the coronavirus pandemic hit in March. Shares are now sitting at $362, according to Stake — a growth of 491% throughout the year.

Zoom’s popularity skyrocketed during the pandemic due to lockdowns and social distancing restrictions across the world forced people to stay at home, leading to a huge increase in the number of people working, studying, and socialising through the app.

At the end of December 2019, the maximum number of daily meetings conducted on Zoom was approximately 10 million, according to the company. As early into the pandemic as March this year, they recorded more than 200 million daily users.

Slack (WORK) came in at number two on the list of the top five pandemic proof stocks. The business communication platform started the year at $23.02 and dropped to $17.04 when the pandemic broke out.

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With many businesses transitioning to remote working, Slack’s stock then increased to a steady $29.93 — a 76% rise.

Earlier this month, enterprise software giant (CRM) announced that it has signed a definitive agreement to acquire Slack for $27.7bn, pushing the share price to $43.84 — an increase of 90% since the start of 2020.

Amazon (AMZN) was the the most valuable share to make the top five pandemic proof stocks, beginning the year at $1,898 before dropping to $1,689 when the pandemic initially broke out.

As online shopping has boomed due to COVID-19, it has now risen to $3,098 — an increase of 63% on pre-pandemic levels.

Netflix (NFLX) came fourth in the list of the top five pandemic proof stocks. The entertainment streaming platform also took an initial dip at the start of the pandemic, falling from $329 to $298.84. However, Netflix become one of the most popular forms of entertainment this year as people were forced to stay at home due to COVID-19 — pushing the stock up by 45% to $476.62.

Fitness company Peloton (PTON) rounds out the top five. As people turned to new forms of exercise while confined to their homes, shares for Peloton’s virtual exercise classes rose by 112% in 2020, increasing from $29.74 to $112.05.

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If investors were to have invested $1000 equally into these five stocks at the beginning of the year, they would currently have a portfolio worth $2900, according to Stake.

The US stock market as a whole has recovered more swiftly than the UK, according to Stake. The benchmark of the UK’s FTSE 100 (^FTSE) was £5,664 ($7,604) at the start of the year, dropping to £3,836 in March. Currently it is recovering and is at £4,773 — a 24% rise since March and a net drop of -16% since January.

The US’ S&P 500 (^GSPC) benchmark was $324.87 in January, falling to $239.85 in March. It has since bounced back to $360.76 — a 50% rise since March and an 11% increase since the start of 2020.

Matthew Leibowitz, CEO of Stake, said: “You only have to look at the markets to see what a strange and inconsistent year 2020 has been across the globe. It has been reassuring however that even with an ongoing global pandemic and a presidential election like no other that the markets have managed to not only survive but bounce back, and in some cases bounce back stronger than ever.”

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