Five top cloud-computing and internet stocks are skyrocketing today. As of 1:05 p.m. EDT Thursday, shares of Blackbaud (BLKB 1.51%), Fastly (FSLY 1.49%), Wix.com (WIX 0.01%), GoDaddy (GDDY -0.43%), and Slack Technologies (WORK) were up between 10.9% and 19.1%.
|Price Change at 1:05 p.m. on March 19
With the exception of Slack (which we will get to in a moment), today's surge wasn't driven by company-specific news, but by a broad market sentiment shifting back in favor of cloud-computing and internet stocks -- at least for today.
Slack's Securities and Exchange Commission filing today helps underpin why that's the case. The company said that from Feb. 1 through March 18 -- about seven weeks -- it added approximately 7,000 new paid customers. That's more than the 5,000 paying customers it added each of the two prior quarters.
Over the past few weeks, stocks have fallen hard and fast across the board, with the S&P 500 losing 29% in 26 days, compared with taking almost 360 days to fall by the same amount during the global financial crisis.
Nearly all of these five stocks have fallen even harder over that same period, even after today's bounce:
Yet their business models in general should prove relatively unaffected by the coronavirus, at least over the long term. Some, as Slack demonstrated with its massive gains in new customers over the past few weeks, may prove even more relevant as their customers rely on tools to support a remote workforce in the months ahead.
That's not to say investors should only expect good things (and higher stock prices) from here. The reality is, we haven't even begun to learn the full health and economic impacts of COVID-19, and those effects will be enormous. And that could see stocks fall again, and possibly much further.
But with that said, market crashes have always been a time to buy in the past. Just because there's a chance these great tech stocks could fall further in the next few weeks or months shouldn't keep investors on the sidelines. The returns we see in a few years are absolutely worth the risk of short-term losses.