Please ensure Javascript is enabled for purposes of website accessibility

Why Amazon, Salesforce, Zoom, and Other Stay-at-Home Stocks Dropped Today

By Joe Tenebruso – Oct 4, 2021 at 5:28PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Could this be the buying opportunity you've been waiting for?

What happened

On Monday, investors sold off many stocks that performed well during the early stages of the pandemic, following encouraging news about a new antiviral drug for COVID-19 late last week. 

Here's how some of the most popular of these stocks performed today:

  • Salesforce.com (CRM 0.73%), down 1.6%
  • Shopify (SHOP 0.05%), down 2.6%
  • Amazon (AMZN -0.77%), down 2.9%
  • Zoom Video Communications (ZM -0.97%), down 3%
  • Peloton Interactive (PTON 0.30%), down 5%
  • Roku (ROKU -0.76%), down 5.6%
  • Pinterest (PINS -0.16%), down 5.7% 

So what

On Friday, Merck (MRK 0.64%) shared interim data from a phase 3 study that suggested its experimental oral antiviral treatment could reduce the risk of hospitalization or death by nearly 50% for patients with mild or moderate cases of COVID. The drugmaker said it plans to request Emergency Use Authorization for the drug from the Food and Drug Administration "as soon as possible." 

A digital chart is displaying declining stock prices.

Image source: Getty Images.

The news prompted many investors to rotate out of so-called stay-at-home stocks and into businesses that could benefit the most should the pandemic come to an end sooner than expected.

Now what 

It's true that some stay-at-home winners will likely see their growth rates slow as the economy reopens. For example, Peloton could see sales of home-based exercise equipment moderate as people return to gyms. Zoom might also find it harder to market its cloud-based communication tools. And Pinterest could face challenges growing its user base if people spend less time online.

Yet the impact to companies like Salesforce and Roku may be less severe. Even as their employees return to traditional offices, Salesforce should continue to enjoy robust demand for its software solutions as businesses further their shift to the cloud. And while people may spend less time watching television as they return to more outdoor activities, the shift toward connected TV should continue to fuel the growth of Roku's booming advertising business.

Investors may also be overstating the risk to Amazon and Shopify. E-commerce growth might slow as consumers return to stores in the coming months, but more retail sales are still likely to migrate to online channels in the decade ahead. 

Thus, patient investors may want to consider using this sell-off as an opportunity to scoop up some shares of Amazon, Shopify, Salesforce, and Roku, particularly if their stock prices decline further in the coming days.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Joe Tenebruso owns shares of Amazon and has the following options: long January 2023 $2,400 calls on Amazon. The Motley Fool owns shares of and recommends Amazon, Peloton Interactive, Pinterest, Roku, Salesforce.com, Shopify, and Zoom Video Communications. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2023 $1,140 calls on Shopify, short January 2022 $1,940 calls on Amazon, and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
360%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.