What happened
As America and the world moved one step closer to an effective coronavirus vaccine over the weekend, the work-from-home trend suddenly seemed a bit less exciting. The development caused big dips in the stock prices of many providers of gear and services related to remote work. Here's how shares of Netgear, Logitech International, and Zscaler fared at noon, EST:
|
Company |
Remote work specialty |
Price change at noon |
Year-to-date price change |
|---|---|---|---|
|
Zscaler (ZS -1.03%) |
Cloud-based network security |
(9.9%) |
223% |
|
Netgear (NTGR -0.15%) |
Home networking equipment |
(12%) |
35% |
|
Logitech International (LOGI -0.06%) |
Webcams, audio headsets, keyboard, mice |
(16.9%) |
99% |
Data source: Finviz.com.
So what
These companies soared over the summer as office workers around the world started doing their jobs from home. Logitech sold a ton of web cameras and mic-equipped headphones to support video meetings, alongside lots of desktop and laptop accessories such as upgraded keyboards and mice. Netgear enjoyed booming sales of high-speed Wi-Fi routers for the same reason, and Zscaler provided security tools that allowed remote workers to connect to their employers' internal networks from anywhere without opening troublesome security holes.
Now pharmaceutical giant Pfizer has shown a vaccine candidate for the SARS-CoV-2 virus with 90% efficiency, and investors are smelling the end for the days of remote office work.
Image source: Getty Images.
Now what
The stocks mentioned above are still crushing the broader market on a year-to-date basis, but this correction could mark the end of their skyrocketing gains. That being said, Pfizer's vaccine candidate still has to complete follow-up studies and jump through some regulatory hoops before it can be distributed on a large scale, and it will take some time to actually control the pandemic even after a final stamp of approval. Several large technology companies have already said that their workers should stay home until next summer, even if a safe and effective vaccine is approved over the winter.
In the meantime, companies like Logitech, Zscaler, and Netgear should see continued strength over the next couple of quarters. Moreover, there's a good chance that the coronavirus crisis started a remote-work trend that won't go away anytime soon. Buying these stocks on large dips like this one lets you bet on an enduring shift toward work-from-home policies.
