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2 Stay-at-Home Tech Stocks to Buy Right Now

By Chris Neiger – Updated Oct 12, 2020 at 1:19PM

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A socially distant world brought phenomenal growth to these companies. But they're not finished growing yet.

Some technology companies have had the unique opportunity to help businesses of all sizes weather the coronavirus pandemic. And some of these tech stocks have thrived as people around the world spend more time at home than ever before. 

Investors who are looking for a couple of investments that are tapping into the stay-at-home trend should consider snatching up shares of Zoom Video Communications (ZM -0.22%) and Limelight Networks (EGIO -0.11%). Here's why these two stay-at-home tech stocks are worth considering right now.

A person on a video call.

Image source: Getty Images.

1. Zoom Video in on this investment opportunity 

I was a bit skeptical about Zoom's stock when it started gaining attention months ago as the U.S. lockdowns began. My hesitation was that there are plenty of other video communication tools available from tech heavyweights, so how could Zoom's services beat them all? 

Boy was I wrong. Zoom's stock is up an astounding 611% so far this year, and the company's revenue skyrocketed 355% in the second quarter. It's clear now that Zoom's customers really prefer its service compared to the long list of other options out there, and despite its already phenomenal growth, there could be more where that came from. 

Video calling existed before the pandemic, of course, but now, Zoom calls have become a regular part of our lives for everyone from school teachers to CEOs. Even when the pandemic is behind us, it's unlikely that Zoom's video calls will fade away completely because it's still a very efficient and inexpensive way to communicate with people.

For example, flying a salesperson across the country for just one business meeting isn't going to be a normal thing to do any time soon. This means that Zoom's video services will likely be an important business tool for years to come. And with COVID-19 cases on the rise in the U.S., Europe, and other places around the world, this stay-at-home stock continues to be just as in-demand as it was at the beginning of the pandemic. 

2. Limelight: Shine a light on this stock

Limelight Networks doesn't have the name recognition that Zoom has, but don't let that keep you from considering what this content-delivery network (CDN) and edge-computing company is doing to make our Internet experience just a little bit better. Limelight's technology helps companies deliver content more efficiently, particularly for video streaming services, and the company has a very impressive client list. Walt Disney uses Limelight for its Disney+ video streaming service, and it's one of the many CDNs that Comcast uses for its new Peacock video service.

Limelight's revenue increased an impressive 58% in the second quarter as businesses tapped the company for its CDN services. But Limelight believes that it has even more opportunities to grow apart from content delivery. Specifically, Limelight thinks the edge computing market could be even bigger than CDN, as companies will need faster and faster ways to send information to Internet of Things devices.

Limelight may be more of an obscure stay-at-home stock, but investors shouldn't overlook how this company's technology allows some of the largest media companies in the world to deliver content to their users during an unprecedented time for video streaming services. 

More than just a temporary bet

While Limelight and Zoom are clearly benefiting from changes to consumer and business behavior because of the pandemic, both of them will likely continue to grow beyond COVID-19. Limelight hasn't fully tapped out its CDN opportunities and is just getting started in edge computing. Meanwhile, Zoom video calls have proved their mettle and will likely be a part of our lives for years to come.

All of this means that investors buying these stay-at-home stocks now should hold onto them long after masks and social distancing are a thing of the past.

Editor's Note: This article has been updated to clarify the nature of the relationship between Comcast and Limelight Networks. 

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Walt Disney and Zoom Video Communications. The Motley Fool recommends Comcast and recommends the following options: long January 2021 $60 calls on Walt Disney and short October 2020 $125 calls on Walt Disney. The Motley Fool has a disclosure policy.

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