The second quarter wrapped up on a generally positive note for stock investors. With the Nasdaq Composite climbing more than 30% in the quarter, investors in technology stocks can’t complain. Jim Cramer, CNBC’s Mad Money host and a former hedge fund manager, has identified a few tech stocks that had a good run in the second quarter. He thinks that the stocks will keep rising.
Notably, Jim Cramer’s favorite tech stocks cover various industries from e-commerce to online video chat and video streaming.
Jim Cramer thinks Shopify is a gold mine
Shopify (NYSE:SHOP) is a Canadian e-commerce technology company. The shares jumped more than 127% in the second quarter. According to Jim Cramer, Shopify has emerged as a strong company in the digital infrastructure space. Right now, everyone needs to go digital.
During the second quarter, Shopify cut strategic deals with Walmart and Facebook. The deal with Walmart lets Shopify merchants list their items on Walmart’s marketplace, which draws more than 120 million shoppers every month. Shopify signed up to back Facebook’s digital storefront feature called “Facebook Shops.” Since the coronavirus outbreak drove people to shop more online, Shopify saw its revenue jump 47% year-over-year to $470 million.
Shopify stock finished the second quarter at $949 per share. Analysts’ target prices show that Shopify could rise about 20% more from the current level to $1,127.
Jim Cramer said, “I bet Shopify will create more millionaires than any other company in America, and they’re Canadian.”
PayPal stock soars, COVID-19 puts pressure on cash transactions
Paypal Holdings (NASDAQ:PYPL) shares rallied 82% in the second quarter. Although PayPal has many competitors, including Amazon with its Amazon Pay service and Square, it singles out cash as its greatest competitor. The COVID-19 pandemic has been fueling the shift from cash to digital payments as people try to minimize physical contact.
The shift to digital payments in the wake of the pandemic helps PayPal tackle cash competition, which bodes well for its future. “I never would’ve thought we’d go from cash to plastic to digital this quickly, but the pandemic threw more fuel on the fire and that’s where we are,” Jim Cramer commented.
In addition to processing payments for merchants, PayPal also provides merchant and consumer loans. PayPal and Square secured roles to help the government disburse the COVID-19 economic stimulus funds to small businesses in the US.
PayPal finished the second quarter at $174 per share. Analysts’ target prices show that PayPal stock could rise 18% more from the current level to $205.
Zoom Video stock is popular
Zoom Video Communications (NASDAQ:ZM) shares jumped 73.5% in the second quarter. The company has become the go-to platform for people who want to host business video chats. The need for videoconferencing has spiked amid the COVID-19 pandemic. There are travel restriction measures to curb the spread of the disease. In addition to hosting business videoconferences, Zoom Video has also become popular for hosting video chats with family and friends during the pandemic. As a result, Zoom has been adding customers and growing its revenue at a record pace.
Jim Cramer said, “Zoom has fundamentally changed the way we interact and our world will never be the same, even after we get a vaccine.”
Zoom Video stock finished the second quarter at $253 per share. Analysts’ target prices show that Zoom Video stock could hit $300 per share or rise about 20% more from the current level.
Apple stock soars after launching cheap iPhone SE
Apple (NASDAQ:AAPL) stock rose 43.5% in the second quarter. The surge came after the company released the low-cost iPhone SE. The cheaper iPhone seems to be a great fit for the pandemic-battered global economy. Also, Apple delivered impressive March quarter earnings results despite the pandemic. The services business stood out in Apple’s earnings report. The revenue in Apple’s services division jumped 17% YoY to set a new quarterly record of $13.3 billion.
“The real core of this story is Apple’s rapidly growing service revenue stream,” Jim Cramer noted.
Apple provides a range of digital services that are in hot demand right now. The digital services include its video streaming service Apple TV+, Apple Music, and Apple Card. The Apple Card is linked to the Apple Pay mobile payment service. Notably, Apple allows its cardholders to purchase a range of its devices, like the iPhone and iPad, on an installment basis.
Apple stock finished the second quarter at $365 per share. Analysts’ target prices show that the stock could rise 16% more to hit $425.
COVID-19 boosts Netflix’s video streaming service
Netflix (NASDAQ:NFLX) stock jumped 21% in the second quarter. Like Amazon, Netflix has benefited from the COVID-19 pandemic. Notably, the uptake of online video streaming has spiked. Movie theatres closed and people spent more time at home amid the lockdowns. The spike in video streaming saw Netflix added a record 16 million subscribers in the first quarter. Netflix stock wrapped up the second quarter at $455 per share. Analysts’ target prices show that it could rise 42% from the current level to $645. Amazon also benefited from the spike in online shopping during this pandemic. Amazon stock jumped 42% in the second quarter. Analysts’ target prices show that it could rise 80% more to $5,000.
Jim Cramer said that Netflix has got to a point where it can hike its service prices with little resistance. Having room to hike prices could help Netflix reduce its reliance on debt to finance its operations. The company’s debt was about $15 billion at the end of March. Netflix plans to release its second-quarter results on July 16.
Finally, besides Shopify, PayPal, Zoom, Apple, and Netflix, Jim Cramer thinks that Etsy, Adobe, Twilio, and Fastly could also pay off big.