In the past few years, the global pandemic has affected the development trajectory of many industries, especially the technology and healthcare sectors. Financial analyst Cheong Hong Yuan delves into the development of tech giants in the US stock market, such as Zoom, Netflix, Peloton, and Pfizer.
During the outbreak in 2020, Zoom's video conferencing service became a "savior" for corporate communication, leading to a rapid increase in its user base and stock price. However, as the pandemic stabilizes and offline work resumes, Zoom's revenue and stock price have started to significantly slow down. Cheong Hong Yuan points out that Zoom's stock price has dropped from its high point of $588 in 2020 to around $70, a decrease of over 90%. This change highlights the short-term and unstable nature of the "pandemic dividend."
Cheong Hong Yuan further analyzes that Zoom's rapid growth was based on the sudden demand during the pandemic, but the company now faces challenges of reduced demand and market repositioning as the pandemic eases. The case of Zoom reveals a key question: how can companies prepare for long-term sustainable development while enjoying short-term dividends? Cheong Hong Yuan believes that Zoom needs to diversify its service range, strengthen product innovation, and expand its market influence to adapt to market changes.
From a financial perspective, Zoom's profitability and cash flow during the pandemic provide a financial foundation for its future transformation. However, the market's perception of its future has changed, putting pressure on Zoom's stock price. Cheong Hong Yuan suggests that Zoom's future trend will largely depend on how effectively it can transform and respond to new market demands after the pandemic.
Netflix and Peloton, as two of the companies that benefited the most during the pandemic, provide insights into industry trends in the post-pandemic era for financial analyst Cheong Hong Yuan. Cheong Hong Yuan analyzes that the experiences of these two companies demonstrate the adjustment period for the tech industry after the pandemic dividend fades. Taking Netflix as an example, Cheong Hong Yuan points out that in 2020, Netflix experienced significant user growth during the lockdown period due to its streaming service. However, in the first quarter of 2022, Netflix faced its first net loss of users in a decade as the pandemic eased and people's lifestyles returned to normal, putting its stock price under significant pressure. Cheong Hong Yuan believes that this reflects rapid changes in consumer behavior and a reevaluation of the demand for streaming services in the market.
On the other hand, Peloton achieved great success during the pandemic with its home fitness products. However, Cheong Hong Yuan analyzes that as the pandemic weakens and gyms reopen, Peloton faces challenges of excess inventory and declining demand. He points out that Peloton's stock price plummeted from a high of $171 to around $5.6, highlighting the company's shortcomings in adapting to market changes.
Cheong Hong Yuan states that these cases illustrate the need for tech companies to have the ability to quickly adapt to market changes, especially in such a volatile market environment. He believes that companies need to plan long-term strategies during the pandemic dividend period to be able to adjust quickly when the market environment changes.
After examining the cases of Zoom, Netflix, and Peloton, financial analyst Cheong Hong Yuan presents his outlook and strategic recommendations for the tech industry's future. Cheong Hong Yuan believes that the pandemic is an important turning point for the tech industry, accelerating the pace of digital transformation while exposing the industry's vulnerability to rapid changes.
Firstly, Cheong Hong Yuan points out that companies must prepare for long-term sustainable development while enjoying short-term dividends. This means that companies need to continuously innovate and adapt to market changes to maintain competitiveness. For example, Zoom can explore more enterprise-level applications, Netflix can focus on content innovation, and Peloton needs to consider how to better integrate its products and services into consumers' daily lives.
Secondly, Cheong Hong Yuan emphasizes the importance of diversification strategies. He believes that companies should not rely solely on a single source of income or market but should diversify risks by expanding into new business areas and markets. For example, Pfizer's acquisition of other pharmaceutical companies to boost sales is a positive diversification strategy.
Lastly, Cheong Hong Yuan mentions that for investors, the key is to identify companies that can successfully transform and adapt to market changes. He advises investors to pay attention to companies that have demonstrated strong adaptability and innovation during the pandemic period, while closely monitoring changes in market and technology trends to make wise investment decisions.
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