Nobody would have thought at the beginning of the year that the global economy will come to a screeching halt this spring. The uncontrollable spread of the novel coronavirus that emerged late last year in China has caused countries across Europe and North America to shut down, with entire branches of the economy suddenly seeing their revenues drop to almost zero.
The industries hit hardest were (and in many places, still are) involved in tourism, hospitality, and entertainment: movie theaters, concert halls, and venues usually swarming with people are now deserted, beaches are empty, restaurants, bars, and hotels are working at a fraction of their capacity at best. According to some estimates, the epidemic could cost the global economy almost $3 trillion.
All industries felt the effects of the pandemic one way or another. In some cases, in turn, the effects were positive. While the industries that rely on people leaving their homes have seen their revenues melt away, those that rely on them staying at home had seen their revenues soar – and this reflected in their share prices, too.
The search giant had two strong months at the beginning of this year, then the economy started to shut down, pushing spending on ads down as well. As advertising is Google’s strongest source of revenue, you may have expected Alphabet’s shares to decrease due to the economy slowing. At the end of the first quarter of this year, though, Google has reported its revenues to grow by 13% – despite a decreased spending on ads, people are using Google’s services more, and this has led to a significant increase of the company’s revenues, profits, and share price.
Netflix
At the beginning of the pandemic, analysts expected Netflix shares to lose some of their value due to the decrease in the speed of their subscriber count’s growth. The quarterly report published by the streaming giant a while ago has contradicted them, though: in the first quarter of 2020, Netflix added more than 15 million subscribers to its total and reported revenues of almost $6 billion in the first three months of the year.
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Netflix CEO Reed Hastings has warned investors that the new customer acquisition of the company will likely slow down as the pandemic passes – things will return to “normal”.
Zoom
Among other measures, health authorities in many countries decided to close schools and recommended that as many people as possible switch to working from home. This has boosted interest in collaborative suites and video conferencing solutions. And the big winner of this year was Zoom, a US-based video conferencing service.
With a huge number of employees switching to remote work and even more children taking classes online, Zoom saw its user base explode in the first few months of the year. The service now has an “unprecedented number” of free users from all over the world (with its limit to 40-minute calls, Zoom makes a perfect online class solution), and its paying customer count has grown by 354%.
Zoom’s share prices reflected this unprecedented growth in its user count: from just $68 per share at the beginning of the year, the prices soared beyond $200, turning its founder and CEO into a billionaire
