Smart investors look to the future instead of dwelling too much on the past or even the present. As bad as the situation looks right now with rising numbers of people infected by the novel coronavirus and a reeling economy, things will get better. No one knows for sure how long it will take, of course. But we won't always live in a world characterized by social distancing and essential vs. nonessential businesses.
It's likely that most stocks will rise once it's clear that the worst is behind us with the COVID-19 pandemic. Some stocks, though, will thrive more than others. Here are three great stocks you can buy to profit in a post-coronavirus world.
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1. Alphabet
Wall Street analysts are warning to be prepared for Alphabet's (GOOG +2.00%) (GOOGL +1.71%) profits to tumble as businesses cut back on advertising spending. Their caution seems prudent, considering that the Google parent makes over 80% of its revenue from online ads.
However, companies won't curtail their marketing budgets forever. They can't afford to. It's too important to get the word out about their products and services. And Alphabet's Google search engine, YouTube video streaming site, and other apps and websites rank among the best ways to target potential customers.
Some of Alphabet's businesses stand to grow as a result of the COVID-19 pandemic. A lot of companies realize now more than ever that online operations are critical. That could fuel greater demand for Alphabet's already fast-growing Google Cloud unit. The company's G Suite productivity tools, which are part of its Google Cloud business, has added 1 million new customers during the COVID-19 outbreak.
Alphabet boasts two things that every investor should like -- a solid moat that protects it from losing market share and multiple paths to generate growth. With the stock still well below highs from earlier this year, Alphabet is a great alternative for forward-thinking investors.
2. Amazon.com
Customers were already increasingly shopping online well before the coronavirus outbreak. And Amazon.com (AMZN +0.26%) was already the 800-pound gorilla in the e-commerce world. The pandemic could make Amazon even more of a must-have for consumers in the future than it's been in the past.
Amazon Prime is almost certainly more popular now than ever before. The service provides free shipping plus a large library of streaming movies and music. With so many people cooped up at home, it's a safe bet that Prime subscriptions have jumped. And once customers enroll in Prime, they buy more from Amazon.
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But the company is poised to profit in the future even if customers prefer to return to shopping in brick-and-mortar stores once the pandemic is in the rearview mirror. Amazon recently unveiled its "Just Walk Out" technology that enables shoppers to buy products in stores without having to check out with a cashier. The company is using the technology in its own Amazon Go convenience stores and licensing it to other retailers.
Like Alphabet, Amazon's business moat and multiple paths to generate growth (which notably include its huge cloud services business) are impressive. The stock has bounced back from a drop of more than 20% in March, but Amazon remains one of the top stocks to buy.
3. Intuitive Surgical
Hospitals have been slammed by the COVID-19 outbreak. As they braced for the worst, most hospitals delayed non-emergency surgeries. This has taken a toll on Intuitive Surgical (ISRG +2.46%), with the company reporting a sharp decline in procedure volume in late March as well as postponements of installations of its da Vinci robotic surgical systems.
However, these delays are only temporary. When the coronavirus crisis passes, Intuitive Surgical should be back in full swing. That day might not be too far away. The company shared information in its first-quarter update that showed weekly procedure volume in China, which was hit early on by COVID-19, has already rebounded to nearly 80% of the normalized run rate.
Intuitive Surgical is set to benefit from two unstoppable trends -- aging demographics and technological advances. As populations across the world age, demand for the types of procedures for which robotic surgery is optimal will increase. And as technology advances, there will be even more procedures for which robotic surgery can be used.
The opportunities in the robotic surgical market are so attractive that other companies are launching robotic surgical systems that could compete against Intuitive Surgical. However, the company has a big head start and an extensive track record, advantages that should make it hard to dethrone it from its industry-leading position. Intuitive is also expanding into adjacent markets, recently acquiring hospital informatics company Orpheus Medical. This healthcare stock should continue to be a big winner for a long time to come.
