The stock market continued to gain ground on Monday, lifted by optimism that coronavirus-inspired shutdowns will continue to lift and stop weighing on economic recovery. As of around 3 p.m. EDT, the Nasdaq Composite (NASDAQINDEX:^COMP) had picked up about three-quarters of a percent. The Nasdaq 100 Index of top Nasdaq stocks saw slightly more muted gains of around 0.4%, which was more in line with the broader market's rise.
Among Nasdaq 100 stocks, however, two companies stood out. Zoom Video Communications (NASDAQ:ZM) once again led the index higher, and Marriott International (NASDAQ:MAR) also posted impressive gains that reflected hopes of returning to a viable new normal in the near future.
Shares of Zoom Video Communications climbed another 13% Monday afternoon, adding to substantial gains recently. With the video conferencing platform provider set to release its latest financial report on Tuesday, investors are apparently getting a head start in celebrating what everyone believes will be an exceptional quarter.
It's easy to understand why Zoom shareholders are so optimistic. The coronavirus pandemic and its related shutdown of a huge swath of the global economy have forced hundreds of millions of people to use Zoom's platform to communicate. Although the company has had its share of glitches during the ramp-up period, Zoom has done a good job of responding to concerns on issues like security while keeping the service up and running despite the huge uptick in traffic.
Exactly how much Zoom could benefit in the short run from its increased popularity is uncertain. Those following the stock expect around an 80% rise in revenue for the quarter compared to year-ago levels, but the range of growth projections is wide, going from roughly 70% to 100%. Zoom's bottom line is expected to see sizable gains on a percentage basis, but the tech stock's profit will remain at best minuscule in comparison to its current stock price.
Zoom investors are counting on the company to hang onto the new clients it won as the pandemic spread. If even a fraction of the hundreds of millions of users actually sign up and pay for the service over the long run, it could prove to be a huge winner for Zoom.
Marriott opens up
Elsewhere, Marriott International's shares saw gains of 7%. Even as hotels remain under pressure, signs of a possible return to normal boosted share prices.
Marriott CEO Arne Sorenson gave an upbeat sense of a possible recovery in discussions at an industry conference. The hotelier has opened all of its locations in China, and it's also starting to see numbers recover in the U.S. hotel market. Occupancy rates are still modest, at around 40% in China and 20% in the U.S., but there are signs of progress in getting more properties open across the globe.
Despite the substantial use of Zoom and other video conferencing services in the business community, Marriott is seeing more of a positive response from business travel than on the leisure travel front. Hotel locations where business travelers are most likely to drive rather than fly are doing the best, according to the Marriott CEO.
Travel stocks have done well lately as the economy has started to reopen, and Marriott investors hope that today's gains will be just the beginning of a broader advance. Much will depend on whether reopening efforts cause a new uptick in COVID-19 case counts, but the hotelier is optimistic that things can continue to return to normal.