4 big stock picks so far this year: Zoom profits soar, Apple banks on 75 million new phones…

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From Zoom becoming the definitive office app of 2020 to Apple betting on 75 million next-gen iPhones, here are some of the hottest movers and shakers in the business world.

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The ongoing pandemic has played havoc with the global economy with many economists predicting long-lasting effects for years to come. Despite lockdowns and shutdowns, some companies and enterprising individuals have seen opportunities during these trying times. Tech stocks have seen the biggest rally as investors seek safe havens amid currency collapse. One of the biggest highlights of the year in the tech space is undoubtedly Zoom. Another stalwart of the trading world is gold which has risen to record highs in 2020 – even attracting naysayers such as business titan Warren Buffett.

We look at some of the best-performing stocks and investment opportunities.

Amazon makes Bezos billions – set to deploy delivery drones.

All Amazon investors should be happy with the company’s performance but none more so than Bezos. He is by far Amazon’s largest shareholder with 55 488 770 shares or 11.1%. Amazon has also moved closer to fly packages to its customers’ doorsteps but more on that later.

Incredible earnings

Amazon (+3.69%) reported a second-quarter profit of $5.2-billion in its earnings report while AMZN shares have nearly doubled from $1500 a year ago to $3550. Net sales increased by 40% to $88.9 billion in the second quarter, compared with $63.4 billion in the second quarter of 2019.

Amazon reported that, excluding the $582 million unfavorable effects in foreign exchange rates throughout the quarter, net sales increased 41% compared with the second quarter of 2019. Amazon Web Services (AWS), saw a spike in revenue – $10.8 billion from $8.38 billion.

Jeff Bezos, Amazon founder and CEO said: “This was another highly unusual quarter, and I couldn’t be more proud of and grateful to our employees around the globe.

“As expected, we spent over $4-billion on incremental Covid-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand – purchasing personal protective equipment, increasing cleaning of our facilities, following new safety process paths, adding new backup family care benefits, and paying a special thank you bonus of over $500 million to front-line employees and delivery partners.

Drones next for Amazon

The Federal Aviation Administration has issued a certificate to Amazon approving its fleet of Prime Air drones to make officially begin deliveries. The company said it would continue to test its drone technology. The landmark certificate, the first of its kind for a major retailer, brings the tech titan closer to its goal of shortening delivery times to 30 minutes or less.

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Apple to build 75 million next-gen iPhones

Despite an economic slump and geopolitical tension between the US and China, Apple has continued its meteoric rise to profitability in 2020.

Apple Inc. (AAPL.O) rose 2.7% on September 1 as the tech giant announced it would build 75 million 5G iPhones later this year.

Apple, reporting a record profitable year so far, is hoping to sell millions of its new iPhone when it’s released later in 2020. The huge order backs Apple’s claims that the company’s most important product, the iPhone, is performing well amidst the global recession. The company says shipments of its next-generation iPhones could reach as high as 80 million units in 2020.

The new phone coincides with a total refresh of its product line-up including a new iPad Air and Apple Watch as well as a smaller HomePod speaker. Apple shares have risen 76% so far this year, surpassing $2-trillion in market value.

The company posted quarterly revenue of $59.7 billion (+11%) and quarterly earnings of $2.58 (+18%) per share. Mac revenue rose to $7.1 billion from $5.8 billion, while iPad revenue increased to $6.6 billion from $5 billion.

Tim Cook, Apple’s CEO, said: “Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments.

“In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation. This is a challenging moment for our communities, and, from Apple’s new $100 million Racial Equity and Justice Initiative to a new commitment to be carbon neutral by 2030, we’re living the principle that what we make and do should create opportunity and leave the world better than we found it.”

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Zoom – The definitive office app of 2020

With lockdowns forcing workers and students to conduct business and studies at home, more companies are relying on tech solutions to continue operating. This has led to a huge need for cloud-based storage solutions and reliable office communication apps. Apps such as Skype, Teams and most notably Zoom Video Communications Inc (ZM.O) have seen a dramatic rise in popularity as the ability to communicate with home-bound workers because critical to the operational success of business affected by lockdowns. One of the biggest success stories during the pandemic-hit economy will be Zoom; it has surged 26.4% premarket (September 2) after the video-conferencing platform raised its annual revenue forecast by more than 30%.

Its revenue jumped to $663.5 million in the fiscal second quarter as the popular app continues to convert more of its huge free user-base to paid subscriptions. The company said sales will be as much as $2.39 billion in the fiscal year ending in January 2021 and its adjusted profit will be $2.40 to $2.47 a share, the company said.

Shares rose to a high of $410, representing a market valuation of more than $100 billion.

Where to next for Zoom?

The trouble with any tech space is competition and Zoom is fending off rival offerings from dozens of competitor apps. Whether it be improved functionality or lower price, all it will take is a better offering from a rival to drop Zoom’s success. Traders will have to be aware of this and the fact that tech stocks are soaring globally.

For future growth, the company is exploring virtual events and possibly partnering with businesses to host remote conferences. This could be a lucrative venture as the global hospitality industry remains stagnant with luxury resorts and venues simply devoid of customers. Virtual events and conferencing could be just the niche to propel Zoom even further, a boon for its shareholders.

The great gold-trading rollercoaster – positive sentiment remains despite price drop

Traders of gold having been smiling for most of 2020 as the gold price soared to record highs. Gold prices have surged this year, as investors spooked by the pandemic sought out a “safe haven” against the crumbling US dollar.

This all came to a crashing halt during August 2020; the gold price ended its meteoric rise from a record $2068 an ounce earlier to trade well below $1900.

The great price drop was remedied on August 17 as gold futures rose sharply, recovering about 62% of the major plunge we’ve seen. Many believe the price could still rally later this year and even reach $3000. 

Overnight collapse

Gold hit a record high of $2068 on August 6, yet at the time of writing, it has fallen to $1968 (Sep 2). The dramatic drop coincides with the US Consumer Price Index (CPI) release; the rebound in the US Treasury yields raised the dollar and sent the commodity plunging. The precious metal lost nearly 6% on August 12, its biggest drop in seven years, to a 7.5% weekly loss. The faster-than-expected rise in the US Producer Price Index (PPI) has raised positive sentiment for economic recovery. This, in turn, has boosted the US dollar.

Opportunity to buy

Once the proverbial dust dies down, many traders will be looking to recoup their losses which could create a great buying opportunity. Gold miners are widening their investment appeal as near-record bullion prices boost profits and dividends. This boom has attracted one of the most unlikely of investors – Warren Buffett. As many traders now, Buffet has been doggedly against purchasing gold for many decades yet added a new stock to his portfolio in 2020 – Barrick Gold.

Still a safe bet?

Despite a bearish sentiment it’s important to note that gold has risen more than 30% in 2020 despite the coronavirus playing havoc with the global economy.  The previous record gold price was $1921 in 2011. Up until its collapse on August 12, enthusiasm for the precious metal was being driven by investors who viewed it as a much “safer bet” than relying on the central banks to curb the economic damage of the coronavirus.

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If you are interested in learning more about how you can take advantage of price movements in the best-performing stocks in tech or aim to gain from fluctuations in the exchange rate of currency pairs, you will find that CM Trading’s unique offering of innovative services and diverse account types is suitable for both beginner and experienced traders.

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