Amid Coronavirus, Why Facebook is One of the Best Stocks to Invest in Right Now

Amid Coronavirus, Why Facebook is One of the Best Stocks to Invest in Right Now

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

The coronavirus is wreaking havoc on financial markets across the globe. Yet when the markets are down, investors often see opportunity. When it comes to the best stock to invest in right now, Facebook is near the top of the list for a variety of reasons.

Coronavirus 2020: Best Stocks to Invest in Right Now

The coronavirus has arrived. Even if you’re lucky enough to not know anyone whose health has been affected at this point, we’ve all been impacted in other ways.

In addition to quarantines and social distancing, economies around the globe are suffering considerable blows. Italy is on the verge of a financial bailout. The U.S. stock market is plunging.

While markets are down, some are trying to turn the negative situation into a more positive scenario by asking, is now a good time to invest? Well, a historical review of stock market activity around previous epidemics would suggest yes. With enough time, the markets have always seemed to recover.

If that’s the case, what’s the best stock to invest in right now?

Is Facebook the Best Stock to Invest in Right Now?

Think about it: across the entire world right now, social interaction is frowned upon. In some countries, it is even forbidden.

People are being forced to stay home. Government enforced quarantines and outdoor curfews are literally becoming more popular by the day.

Restaurants and bars are closing. Schools are closing. Public gatherings are forbidden. Social distancing is encouraged to the maximum — all in an effort to contain the highly contagious coronavirus.

So, what does this mean for Facebook? Well, to put it simply, people need to stay in contact somehow. As a social media giant, Facebook estimates 2.5 billion active monthly users worldwide.

People clearly already leverage Facebook as the most popular digital medium to stay connected. Since they’ll be physically disconnected, it would only make sense to see increased engagement across Facebook’s platform to deal with the lack of face-to-face interaction.

In addition to staying connected to family and friends, many employees will be working from home, some for the first time. Facebook will be a means of communication here as well.

Further, Facebook is a major news source for much of the world’s population. In the US for example, recent research suggests 55% of adults get news from social media either “often” or “sometimes”. Out of those who do depend on social media for news, 52% turn to Facebook.

Why Facebook Stock will Beat the Coronavirus

We already know Facebook’s successful history will be enough for the platform to weather the coronavirus-spurred economic storm. That’s what Facebook COO Sherly Sandberg has said at least.

On March 16th, Sandberg told Bloomberg,

“We know that we can keep paying our employees, paying our contractors, we know we can keep the lights on.”

Sandberg added that the coronavirus will undoubtedly take its toll on the marketing industry. Since Facebook has more than 8 million businesses that advertise on its platform, one would think Facebook would take a hit here as well. But will that actually be the case?

Not necessarily. With Facebook likely to experience increased engagement throughout the coronavirus pandemic, businesses will have plenty of incentive to advertise on the platform.

Granted, some companies will advertise less, or discontinue marketing efforts altogether, in an effort to survive the storm. The airline industry is one such example.

This will likely result in a significant impact for some advertising platforms, such as Alphabet’s Google. Google gets a considerable amount of its advertising revenue from the travel industry.

When it comes to Facebook however, the company has invested notable efforts in e-commerce advertising campaigns. With more people staying home to prevent the spread of the coronavirus — and wary of making consumer purchases in physical stores — those efforts could bear serious fruit in terms of Facebook’s advertising revenue. 

Even once the financial markets initiate a recovery, Facebook is likely to see continued revenue growth. For most industries and niches, digital advertising simply gets better results than traditional advertising, such as television or print.

Some businesses will largely slow down operations during the impending economic downturn. Once the economy starts improving, those companies are only likely to jump into digital advertising as opposed to the alternatives.

All of this is to say, there’s plenty of reason to see Facebook as a viable investment option given the current economic situation. Facebook seems well-poised to both weather the storm and see continued success when the sun returns.

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

What do you think about the future of Facebook stock with the ongoing coronavirus? What do you think are the best stocks to invest in right now? We want to know what you think in the comments section below.

Image courtesy of the South China Morning Post.

Disclosure: Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.