By Jeff Brown | Apr 8, 2021 | 4 min read
The COVID-19 pandemic radically changed the way we live our lives.
Many of us began working from home. Kids started remote school. Conferences and social gatherings were canceled, and travel slowed to a crawl.
And many of us had food or groceries delivered to our homes. We even learned how to socialize and entertain ourselves from home.
The pandemic and lockdowns were a catalyst that forced many of our behaviors to adapt. And we’re still seeing the effects a whole year later.
But there’s one other important way the pandemic altered the world around us… It sped up the pace of something I call a “digital leap.”
A digital leap is when an entire industry transitions from analog to digital. And whenever a digital leap takes place, it can be one of the most profitable events in the stock market.
We’ve seen this happen before numerous times.
We saw it when Amazon made going to a brick-and-mortar store unnecessary… letting us order products online and receive them on our doorstep in mere days. Companies that failed to quickly adapt to the new digital retail space – think of Sears and JCPenney – got crushed. But Amazon’s stock has risen to over $3,000 a share.
Or consider Blockbuster. It completely missed the digital leap from VHS and DVD to streaming video… even passing up the chance to buy Netflix. But Netflix’s own stock price has risen over 43,000% since it went public in 2002.
Investors who positioned themselves ahead of these digital leaps had a rare and extraordinary opportunity to become wealthy. And that’s why the pandemic’s effect on these digital leaps is so critical to follow.
After all, during the pandemic, many businesses had no other choice but to go digital. And that has provided some huge tailwinds for these digital leaps…
COVID-19 Sped Up Digital Leaps
The pandemic has had an outsized effect on the industries making digital leaps.
As one example, many people have been avoiding unnecessary contact with others over the past year… and instead have chosen to buy things online and have them delivered. During the first quarter of 2020, for example, e-commerce spiked 49% year over year.
It’s easy to understand why. The lockdowns made it much simpler for people to order the things they need instead of venturing out. Who wanted to interact with others and risk exposure to the virus?
And that’s how Amazon was able to grow its 2020 revenue 38% from the previous year – an increase of over $100 billion.
Another example is Square. Despite already growing at a fast pace, Square’s Cash App saw a boom during the pandemic as well. Its Cash App revenue doubled during the pandemic to $325 million in the second quarter compared to the year before.
And it makes sense. After all, people didn’t want to handle cash, which could potentially spread germs. And Cash App made it easy for people to accept their stimulus checks and unemployment benefits. The pandemic fast-tracked this digital leap.
Our work experienced a digital leap too. Businesses had no choice but to adapt.
Technologies like Zoom, Google Hangouts, Microsoft Teams, and Webex transformed our communications with our coworkers and clients. Zoom’s stock alone rose over 500% from the start of the pandemic until its peak.
Digital contracts also benefited from the pandemic. This is the tech that is helping companies complete contracts and paperwork securely and without ever meeting in person. One recommendation I made in this space skyrocketed over 400%.
And more critically, after the pandemic is over, this trend isn’t going away… the convenience is too high.
Now that people have gotten used to having their groceries dropped off at their doors… and companies have gotten used to the way digital contracts streamline their business… virtually no one is going to go back to the old way of doing things.
That’s why these digital leaps are so important. They change the way we live our lives. Of course, as investors, these large profits are why we need to keep our eye on spaces where we are seeing a digital leap take place…
The Last Digital Leap
There’s one more reason why I’m so excited about the pandemic throwing digital leaps into overdrive.
And that’s because I see a rare opportunity for investors to get in early on a digital leap that’s just entering the earliest stages…
Full story on BrownstoneResearch.com
