3 Top Tech Stocks to Buy During a Recession
The U.S. economy has suffered some serious blows in 2020 as pandemic-induced lockdowns have forced many workers out of their jobs and shut down businesses. Some of those jobs have come back, but many haven't.
And even as a coronavirus vaccine is now in the early stages of being delivered, its positive economic effect will still take many months to play out. If you're looking for a handful of
1. Apple
Apple may not be as alluring of an investment as other fast-growing tech stocks -- but during a recession this tech stock is a great company to know. Apple is a tech behemoth that has its hand in everything from
For example, Apple has
The company's services revenue growth proves that Apple is more than capable of generating recurring revenue from its customers long after they've purchased one of the company's devices.
Investors should also take note that despite one of the most unpredictable and difficult years in memory, the company reported
2. Amazon
Another tech juggernaut that deserves to be on any investors' recession buy list is the e-commerce and cloud computing powerhouse Amazon. The company proved this year that when tough economic times come it can not only thrive, but also help create jobs at the same time.
Amazon's e-commerce business has been in demand more than ever before and that's pushed the company's sales up 37%
As a direct result of this increased demand, Amazon went on a hiring spree this year, adding more than 400,000 new positions. The company has received pushback in the past for some of its warehouse conditions and
Amazon has also seen its
3. Roku
Roku has weathered 2020 remarkably well and there's reason to believe it could do so during future recessions. TV viewers flocked to Roku this year, because, well, there hasn't been much to do besides watch TV. In the third quarter (reported on Nov. 5)
Those figures jumped as the company attracted more users to its video platform, with active customers up 43% from the year-ago quarter. The amount of money the company makes from those users also increased, with average revenue per user (ARPU) spiking 20%.
Unsurprisingly, a recession didn't pull people away from their TVs. Consumers continue to cut their cable cords and shift toward streaming services from Netflix, Walt Disney, Apple, and others, and as they do many of them will access these services using Roku's platform. An estimated 6 million people will cut the pay-TV cord this year and at the end of 2024 more than one-third of them will have done so, according to research firm eMarketer.
Roku makes money when users sign up for a streaming service through its platform as well as advertising, and as demand for both increases the company should continue to benefit. The company said in the third quarter first-time advertisers more than doubled from the year-ago quarter. As more people cut their pay TV services in the coming years, more ad dollars could follow cord-cutters to Roku's platform.
Remember this one thing
Of course, there's no guarantee that any company will thrive during a recession, but the companies listed here have solid businesses that should make great long-term investments. This means that when difficult economic times come they should be able to ride them out and continue growing. But investors need to hold onto these stocks for years, not months, to experience the full benefit of investing in these companies.
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