Back-to-School Season 2020 to be Tech Driven: 5 Picks
One of the busiest shopping seasons of the year – Back to School – has hit the market. Every year, retailers eye the start of the new school season to make money but this year the shopping trend may be a little different thanks to the coronavirus pandemic.
As per the National Retail Federation (NRF), back-to-school spending is likely to be an average $789.49 per family, surpassing the previous record of $696.70 last year. Spending is expected to total $33.9 billion, up from $26.2 billion last year and past the record of $30.3 billion set in 2012.
The majority of outlays would be made on tech products as the school year will likely begin with remote learning. According to a survey done by NRF, 63% of K-12 families look to buy computers and other electronics this year, up from 54% last year, and they expect to shell out more at an average $274.44, up from $203.44 last year.
Purchases will also be made primarily online despite the gradual reopening of bricks-and-mortar stores. More than half of K-12 shoppers (55%) say they will buy online, up from 49% last year. Other conventional shopping destinations are expected to see a decline in footfall.
Per the NRF survey, 36% expect to buy laptops, 22% are likely to buy computer speakers/headphones, 21% may buy other accessories such as a mouse or flash drive, and 17% would buy printers. Also, 17% plan to buy non-computer items including calculators, furniture like a desk or chair, and workbooks. Tech products like laptops, Chromebooks, mesh routers, wireless earbuds, and smart speakers should be in high demand this season.
Investors should note that the pandemic brushed aside challenges in the space of virtual schooling, giving immense technological insights. “Cloud-based video conferencing software became virtual classrooms. Online learning applications became curriculums and textbooks. And digital learning platforms became teacher’s assistants, helping teachers organize and deliver coursework, while giving students a place to interact with their teachers,” per Global X.
In short, tech stocks are likely to surge again in the near term. The tech space has benefited a lot this year from the work-from-home culture. Now e-learning would be another driver to boost this surging segment a shade further. Against this backdrop, below we highlight a few tech-related stocks that could win from the back-to-school season 2020.
Mini Computers – Apple Inc. (AAPL) – Zacks Rank #3 (Hold)
Many computer giants have already thrown in back-to-school sale. Apple will offer a pair of AirPods free if you buy Mac or iPad with education pricing. Moreover, there are discounts on accessories and 20% savings on AppleCare+.
Computer Peripheral Equipment – Logitech International S.A. (LOGI) – Zacks Rank #1 (Strong Buy)
Logitech International S.A. is a global leader in peripherals for personal computers and other digital platforms, which develop and market innovative products in PC navigation, Internet communications, digital music, home-entertainment control, video security, interactive gaming and wireless devices. Such offerings make it clear why Back-to-School season 2020 could prove great for the company.
Internet Services – Alphabet Inc. (GOOGL) – Zacks Rank #3
Alphabet’s Google Classroom has also been quite popular among students and teachers. The program helps students organize their homework, communicate and participate in day-to-day learning tasks. It enables teachers to keep track of the coursework, thus crAeating an overall successful online learning platform. Plus, there is Google Meet as another video-communication service. If this was not enough, Google has a bunch of gadgets to offer to the students in this new school season.
Wireless National – Cogent Communications Holdings Inc. (CCOI) – Zacks Rank #2 (Buy)
Cogent Communications Holdings Inc. is a Tier 1 Internet Service Provider (ISP) that offers low-cost, high-speed Internet access, private network services and colocation center services with ultra-low latency data transmission. The company provides its services to more than 200 major markets. The greater need for Internet access will also benefit the stock in the new school season.
E-Commerce – Wayfair Inc. (W) – Zacks Rank #3
The company is one of the world's leading online sellers of home goods products, consisting of furniture and home decor. The stock has been a huge beneficiary of the work-from-home trend this year due to the higher need for home office furnishings. From Apr 1 to May 5, sales of the company were up 90% year over year. We can expect the back-to-school trend to benefit the company in a same way.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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