Covid-19 has been terrible but it has created favourable market conditions for these three tech stocks. The workflow of each company was easily adaptable to a work-from-home world so they only suffered minor initial disruption.
More importantly, the services they provide businesses became even more valuable to organisations in each of their respective sectors.
Tech stock #1: A leader in gaming services
Keywords Studios (LSE:KWS) is heavily entrenched within the gaming industry. You may not have heard the name before, but this tech stock is at the core of most blockbuster games titles being released today.
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Developing a game is an expensive investment that can lead to financial ruin if a project fails to meet expectations. To minimise risk, studios tend to retain just a small team of permanent staff. The rest of the talent is acquired per-project from companies like Keyword.
It offers a wide range of services that expand with each additional bolt-on acquisition it makes. Today, Keywords Studios provides services that cover almost every aspect of a project’s development cycle. This includes art, programming, audio, quality assurance, marketing, and game testing.
Tech stock #2: A leader in e-commerce marketing
The gaming industry saw a boost in player activity throughout multiple lockdowns – being stuck at home is boring, after all, and games are a great way to pass the time. But online shopping also saw a rapid rise in demand, which is where dotDigital (LSE:DOTD) comes in.
Online reached almost a third of all UK purchases back in March. But the proportion of online shopping compared to physical retail had already been increasing each year as people grew more comfortable buying products and services online. DOTD is a solution for business seeking to attract new customers.
It provides a cloud-based marketing platform that enables its clients to launch automated digital marketing campaigns through emails, text messages, and social media.
The firm is quite similar to Salesforce, but more specialised in the ecommerce market space through its partnerships with Shopify, Microsoft and Adobe.
Tech stock #3: A leader in remote talent development
Learning Technologies Group (LSE:LTG) is another business that has been able to take advantage of changes this year.
A key ingredient to any successful business is a talented workforce that remains talented as innovations occur. It’s a common practice for companies to train and retrain their staff. However, this process is expensive, and since the first lockdown, face-to-face training has not been possible.
LTG offers a variety of digital learning services and software for corporations. Employees can go through online classes, examples, and materials at their own pace. This makes the process far more enjoyable, as well as reducing the cost of training for businesses.
With average annual revenue growth of 60%, the firm has become a leader in a highly fragmented market space.
The bottom line
All three companies were doing exceptionally well before the pandemic. And while Covid-19 is a tragic global event, it has enabled them to do even better due to the increased demand for new solutions in their respective sectors.
As a shareholder in all three businesses, I’ve enjoyed a large return on my initial investment. And since each one continues to thrive, even as the pandemic is coming to a close, I believe these returns are nothing compared to what the future might hold.
