Over the July fourth weekend, the United States registered a whopping 156,000 new coronavirus cases. Even though the spike in cases has slowed down in states like New York, confirmed coronavirus cases have increased across almost 40 U.S. states.
Over the past week, new coronavirus cases are up 42% in Florida, followed by 40% in Montana, 37% in Virgin Islands, 33% in Idaho, 32% in Arizona, 30% in South Carolina, 29% in Texas and 21% in California during the same period, per the Washington Post. The paper added that the seven-day average of new coronavirus cases was 48,361, up from 11,740 a week ago.
Particularly in Texas, the number of new coronavirus cases jumped by more than 6,000 on Jul 4, taking the total in the state to almost 200,000. Meanwhile, Florida reported 10,059 new cases on Jul 5, after reporting 11,458 new cases on Jul 4. In Florida, there are now nearly 200,111 coronavirus cases and the state has seen a significant rise in hospitalizations of late.
Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said that the early reopening of many states, failure to maintain proper social-distancing norms and the authorities’ lack of effort to trace infected people are mostly responsible for this unprecedented surge in coronavirus cases, which many fear to be the second wave.
But, from an investment perspective, this spurt in new cases bodes well for certain stocks. Thus, placing your bets on such stocks won’t be a bad proposition for now. Take a look –
Clinical Stage Biotech Player Abbott
The coronavirus outbreak has, no doubt, compelled investors to bet on companies working on the treatment and prevention of the virus, specifically clinical stage biotech firms.
Notable among them is Abbott Laboratories ABT. In the past few months, the FDA has authorized five of Abbott’s coronavirus tests. At the same time, Abbott reached an agreement with the U.K. government to supply its laboratory-based IgG antibody tests, which help in identifying infected people.
Separately, the company’s medical device segment has been a strong driver of growth. For instance, Abbott’s FreeStyle Libre continuous glucose monitoring (CMG) system for diabetes care recorded a sales rise of more than 60% in the first quarter. Going forward, the branded generics and international diabetes businesses should drive growth.
Abbott currently has a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its current-year earnings has risen 0.4% over the past 60 days. The company’s expected earnings growth rate for the next five-year period is 8.6%.
Shelter-in-Place Stocks – Zoom & Amazon
With new cases on the rise, people are willing to spend a lot more time at home. The stay-at-home trend is a blessing in disguise for videoconferencing platforms and dominant cloud players.
In recent times, Zoom Video Communications, Inc.’s ZM paid subscriber growth for the video conferencing service improved, and CEO Eric Yuan said that the Zoom platform has been able to provide “an incredibly valuable service to our beloved users” amid the coronavirus-induced stay-at-home scenario.
Going forward, the company’s efforts to eradicate security and privacy flaws are expected to help Zoom Video expand user base. The Zacks Consensus Estimate for its current-year earnings has risen more than 100% over the past 60 days.
The company’s expected earnings growth rate for the current quarter and year is 462.5% and 237.1%, respectively. In fact, the Zacks Rank #1 (Strong Buy) flaunts a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
As majority of people are expected to work or learn remotely, most companies need to move a bulk portion of their workload to the cloud. Thus, any consumer-oriented business needs to have a digital presence built on the cloud in order to survive.
Hence, Amazon.com, Inc. AMZN is certainly under the spotlight as it is currently one of the biggest players in the cloud infrastructure market. The Seattle-based company has a solid presence throughout the Internet via Amazon Web Services (“AWS”).
Amazon, in itself, is benefiting from its Prime program, delivery and logistic system in the e-commerce space. The company currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has climbed 1.7% over the past 60 days. The company’s expected earnings growth rate for the next quarter is 18.4%.
Dominant AI Player – NVIDIA
The rise in cases may disrupt industries but it can also speed up the adoption of AI. After all, AI has touched almost every sphere, including advertising, healthcare, robotics, retail, video streaming, gaming and urban development.
And NVIDIA Corporation NVDA is one of the biggest names when it comes to graphics processing units (GPUs), which are more or less used by all major tech firms to help servers implement machine learning services, which again is an integral part of the broader AI market.
NVIDIA currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has moved up 4.9% over the past 60 days. The company’s expected earnings growth rate for the current year is 36.4%.
Reflecting the positives, shares of Abbott, Zoom, Amazon and NVIDIA have gained 6.2%, 284.7%, 56.4% and 63.4%, respectively, so far this year.
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