Last week was rough for the stocks that have thrived in the new normal. Zoom Video Communications (ZM 1.41%), DocuSign (DOCU 2.44%), Teladoc Health (TDOC 2.92%), Wayfair (W 3.75%), and Peloton Interactive (PTON 2.19%) all suffered double-digit percentage hits last week even as the general market moved higher.

Unless you happened to be buying into any of these names earlier this month you're probably doing just fine right now. The five high-flying investments have risen between 119% (Teladoc) and 493% (Zoom) in 2020 even after last week's slide. Wall Street seems to be rotating out of these stay-at-home bellwethers that initially bucked the market malaise when the COVID-19 crisis became a stateside reality.

Don't buy into the freshly fashionable pessimism. They were winners earlier this year because they had the right models at the right time. They will continue to trounce the market in 2021 because they are all riding hot trends that aren't going away anytime soon. 

Someone jumping from a 2020 cliff to a 2021 cliff.

Image source: Getty Images.

It's the pause that refreshes

There were some dark days for investors in late February and early March when it became clear that the coronavirus calamity was going to crush our economy and way of life. Investors in Zoom, DocuSign, Teladoc, Wayfair, and Peloton saw their stocks rise on some of the market's worst days. 

We can call it a flight to quality during some of this year's earlier down days for the market, even if none of these names are prototypical blue chips. Zoom was going to be the way business meetings, classrooms, and family reunions got done through the pandemic. DocuSign was replacing wet in-person signatures with digital document handling. Teladoc's telehealth platform became the safe way to see a medical professional. Wayfair was the high-tech way to update the home that you suddenly found yourself spending a lot more time in during the crisis. Peloton took the baton from spinning classes and gyms that were initially closed and are now just not safe enough in the eyes of many sweat-seeking consumers. 

Were the heady gains warranted in the first place? It's a fair question, especially since we ultimately had a lot of investors chasing only a handful of well-positioned companies built to thrive in this climate. We've seen supply and demand play out on Wall Street. From cannabis to cryptocurrency, speculators and investors load up on the handful of publicly traded names, even if all that the extra attention does is drum up more competitors and related IPOs. The bubble eventually pops, leaving a sudsy mess for stocks that got ahead of themselves in the feeding frenzy.

I don't think you'll experience the same play out here. There is no glut of better mousetraps waiting to hit the market. No one is going to catch up to Zoom or Peloton with the triple-digit revenue growth they're posting in their markets these days. DocuSign, Teladoc, and Wayfair are growing their businesses in the double digits, but can you name a viable competitor in the niches they are dominating? 

Let's fast forward to the point where the pandemic is nothing more than a draining historical footnote. Will all your meetings be in person? Will all your signatures be hand-delivered in person or by mail? Are you going to wait for the next available in-office doctor or therapist appointment when you need some medical assistance? Is there a local furniture showroom large enough to stock everything Wayfair offers with the scale to match on pricing? Won't it always be easier to walk a few steps from your bed to your Peloton treadmill or stationary bike for an interactive workout session?

Zoom, DocuSign, Teladoc, Wayfair, and Peloton were already disrupting the markets before the COVID-19 outbreak. Those platforms won't be displaced when we emerge from the crisis. The pandemic sped up the incubation process, cementing the new leaders into place faster. Valuations may have been stretched in the process, but they will be earned by all five of these growth stocks if they haven't been earned already. These five investments are winners now, and they will continue to be champions in the year ahead.