On a bullish day for the overall stock market on Monday, many stocks soared higher, but some fell sharply. Tech stocks DocuSign (DOCU 2.31%), CrowdStrike Holdings (CRWD -2.12%), and Wix.com (WIX 0.25%) are among those that were hit particularly hard. As of noon EST, the three stocks were down about 11%, 6%, and 10%, respectively.
The three tech stocks are down primarily on news of successful human trials for a COVID-19 vaccine. A vaccine developed by Pfizer and BioNTech has helped prevent over 90% of symptomatic infections for tens of thousands of subjects, Bloomberg reported early Monday morning. Some investors may be betting that the tailwinds driving organizations' digital transformations as people shelter at home could moderate when a vaccine comes to market, potentially to the detriment of these companies.
E-signature company DocuSign has seen increased demand in 2020 as more people are conducting work virtually. Revenue jumped 45% year over year in the company's most recent quarter as billings rose 65%. The company's revenue growth was an acceleration from periods before the coronavirus. Total revenue in fiscal 2020 -- a 12-month period ending on Jan. 31, 2020 -- rose 39% year over year.
While cybersecurity company CrowdStrike said that organizations are accelerating their digital transformations in 2020's environment, the company was growing even faster in 2019 than it was in 2020. Its total revenue for the fiscal year ended Jan. 31, 2020 was up 93% year over year. In the company's most recent quarter, revenue was up 84% year over year.
Wix's website-building business has similarly benefited from tailwinds of companies going digital. But its revenue growth acceleration has been moderate. Second-quarter revenue was up 27% year over year -- compared to 26% year-over-year growth for the full year of 2019.
In Wix's second-quarter earnings release, CFO Lior Shemesh captured the momentum many tech companies have been seeing in 2020 as people shelter at home: "The need for business owners to move online quickly, communicate with customers, and deliver goods and services has never been more imminent," she said.
DocuSign CEO Dan Springer similarly pointed out the favorable environment in the company's Sept. 3 quarterly update, pointing to "an accelerating digital world where business can be conducted from anywhere."
Going forward, it's unlikely that business growth for these three stocks will decelerate significantly. The tailwinds powering their businesses were thriving going into the pandemic and they will likely be just as strong (if not stronger) exiting it.
For many companies, COVID-19 simply accelerated the inevitable. At some point, most businesses would have had to eventually begin adopting more modern solutions -- the coronavirus just made these digital transformations mission critical instead of optional.