These 3 tech stocks are set for 2021 monster

The stock market has picked up some very good gains this year and part of its success has come from technology stocks. Technical firms, in general, have done well in 2020 as investors looked for stocks that could thrive at a time of lockdown and social pace.

With multiple coronavirus vaccines on the horizon and hopes of a pandemic in 2021, some investors are looking ahead and trying to decide which technical stocks will be the best bet for the year. ahead. To help you find a few of them we asked three people who sent Motley Fool for stocks that they think are ready for further growth in 2021. They came back with Roku (NASDAQ: ROKU), Square (NYSE: SQ), and Appian (NASDAQ: APPN). Here’s why.

Man pointing smartphone screen.

Image source: Getty Images.

Roku: The road to flow

Danny Vena (Roku): Streaming video was already coming into its own before the pandemic, when locksmiths and stay-at-home orders had to be essential for home entertainment. The number of video recorders streamed past cable TV for the first time in 2018 and cord cutting is accelerating, so nothing is going backwards. As a leading collection of streaming video channels, Roku (NASDAQ: ROKU) which has the most benefit from the move and has established itself for a monster year in 2021.

Roku provides access to the high-definition streaming services, among others Netflix, Amazonin the Main Video, and Walt Disneythe service name, Disney +, but it doesn’t stop there. The platform offers over 10,000 streaming apps and hundreds of live TV channels. As a result, Roku offers more streaming options than any other platform.

The streaming pioneer gets a percentage of the ads seen on the supported channels on its platform, as well as a cut of the monthly subscriptions from paid services when customers sign up using Roku. The company also gets all the advertising from their own streaming offering, The Roku Channel.

One of the most undeveloped weapons in his arsenal is the Roku smart TV (OS) operating system. The company built a special OS from the ground up, instead of settling for a rebuilt mobile app, the solution that many competitors would use. Its ease of use and intuitive user interface made it the choice of a growing number of TV manufacturers that allow the system. As a result, the Roku OS was found in one in three connected TVs sold in the U.S. last year, and one in four in Canada. This will give the company an unrivaled tooling base.

The advertising, The Roku Channel, and the OS franchise create a trifecta of platform segment revenue, which is driving growth similar to Roku’s wildfire. In the third quarter, revenue jumped 73% year-over-year, led by the platform segment, which climbed 78%. At the same time, active users grew 43% and average revenue per user (ARPU) grew 20%. Consumer engagement is growing, as viewers watched about 3.5 hours a day, on average. This resulted in a total of 14.8 billion hours, an increase of 54%.

Roku has made several announcements in the past few weeks that strengthen his position as a streaming leader. The company released a limited edition $ 17 Roku SE streaming player, just in time for the holidays. Roku also made the long-awaited news that it had finally reached a contract AT&T to carry its flagship service, HBO Max. Roku used the deposit of 46 million viewers to secure a more favorable deal with HBO on the eve of the upcoming release Wonder Woman 1984.

There is little doubt that 2020 was a flagship year for Roku, but with the company’s movement and direction, 2021 could be a real monster.

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Square: All (eco) systems are gone

Brian Withers (Square): Square started with a simple concept of allowing small businesses to incorporate credit card payments with a small square-shaped device connected to a merchant’s mobile phone. Over time, the company has expanded its services to vendors to a complete ecosystem of applications to allow businesses large and small to run their operations. In the last few years, the company has also added the Cash App. This growing business sector is focused on the provision and ecosystem of digital banking and brokerage services. Over the past year, these two ecosystems have been on different paths.

The coronavirus has accelerated the popularity of the Cash App. More customers are going to the machines and accepting more services and doing more transactions. This has driven the overall profits of this sector to record high levels. The full-digit profit growth has accelerated even in the last two quarters. Note that Square uses total profit as a key metric to compare its shares as revenue from its bitcoin sales can reverse the movements of the underlying business segments.

Cash App Metrics

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Total App Cash Profit ($ M)

$ 123

$ 144

$ 183

$ 281

$ 385

YOY Growth Cash Cash Profit






Data source: Square employment distributions. YOY = year over year.

On the other hand, the coronavirus has adversely affected vendors. Small businesses have struggled to close stores and reduced consumption in brick-and-mortar establishments. The company has tried to help vendors with the release of new platform capabilities such as online ordering and loop building. This has helped, but growth rates have grown much slower compared to pre-coronavirus growth rates.

Ecosystem Metrics Vendors

Q3 2019

Q4 2019

Q1 2020

Q2 2020

Q3 2020

Total Seller Profit ($ M)

$ 364

$ 379

$ 356

$ 316

$ 409

YOY growth wholesale profit






Data source: Square employment distributions. YOY = year over year.

As a result, the retailer’s ecosystem has fallen from 75% of total total profits in the third quarter of 2019 to 52% in the most recent quarter. But there are signs that things are starting to improve for Square sellers. The most recent quarter saw total retailer profits rise 29% in order to $ 409 million higher. This was the first quarter since the coronavirus hit that this region saw positive sequential growth. This increase was largely driven by 50% growth in online sales, strong international sales, and a steady rate of new customers coming on board over the last two quarters.

Looking ahead, things should only get better for those two areas. As the coronavirus vaccines are rolled out, consumers should become more comfortable venturing out, and this should allow sales from small businesses to grow at a faster pace. Within a year, I wouldn’t be surprised to see wholesale retailer growth in the 20% -above range again. As for the Cash App, its triple-digit growth rates are likely to slow, but the revenue will follow a record position and the overall profit movement.

As the growth of the vendor ecosystem becomes healthier, the company’s overall profit margin will hit the top levels as well. With both ecosystems set to achieve new highs in 2021, investors should be able to share in the success as well.

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Image source: Getty Images.

Knocking in the app’s prompt

Chris Neiger (Appian): When AppleThe App Store was shut down in 2008 with only 500 apps. Now, the App Store has 1.96 million apps and the Google Play Store has 2.9 million. As demand for apps continues to grow, Appian is making it easier than ever for companies to build their own.

Appian low code software development platform helps companies of all sizes to build their own apps without the need for code writing experience. This makes app building much more accessible to companies and reduces the hurdle for creating new apps quickly. And the app industry is thriving.

Appian sales jumped 17% in the most recent quarter, led by a 40% jump from the company’s cloud revenue. The company expects its cloud membership sales to continue to grow and end the full year 2020 up 34% from the fourth year ago.

While the company has performed well this year – pushing their stock price up 297% year to date – the company expects the same accelerating trends in 2020 to continue. into the next year. Appian CEO Matt Calkins said of the company’s third-quarter employment call, “I expect strong workflow or process management, if you prefer, to be a key distinguishing feature in our two key markets, low code, and automation, in 2021, and Appian is well placed to benefit from that shift. ”

The mobile app market is growing, expanding from a $ 106.2 billion market in 2018 to an estimated market of $ 407.3 billion by 2026. Appian is still at an early stage entering the low code app development trend and investors looking for fast- it would be wise for a growing tech company to invest in 2021 (and beyond) to take a closer look at this company.