San Francisco, CA

San Francisco stocks: Week of 4/5-4/9. An eye on Salesforce, Uber, and Airbnb.

Geoffrey Greer

Great week for San Francisco stocks

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Photo by Annie Spratt on Unsplash

Here is an amazing statistic: In 2020, a person with a $500K stock portfolio invested in a broad index of U.S. stocks made approximately as much money as the average family of four in the United States. That's right. An investor with a $500K stock portfolio made as much money by doing nothing as a family of four did by working every business day.

That's how important creating and investing wealth has become.

Let's take a look at how three San Francisco stocks performed the week of 4/5-4/9: Salesforce, Uber, and Airbnb. San Francisco is home to some of the most exciting and compelling companies in the world so it is a bellwether for the overall performance of the stock market. San Francisco leads the technology market and technology leads the stock market.

To add to the excitement, unicorn San Francisco startup Coinbase will be going public on April 14. This is likely to push the crypto market, if not the entire market, up higher.

Salesforce

Salesforce continued to boom last week as this chart shows:

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Screenshot by the author

Bank of America is touting Salesforce as part of its 4M stock analysis: Market, Moat, Management, and Margin. Bank of America believes that Salesforce can continue to grow its revenue at 17% every year.

Uber

Uber fell slightly last week:

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Screenshot by author

The big news from Uber this past week is its new incentive program for drivers. Uber is running into a simple problem: As the economy roars back to life, it is short of drivers. Uber drivers abandoned the platform during Covid and so now the company finds itself short of drivers.

The stock probably dropped because of this surprise outlay of cash. In a piece titled "Getting Drivers Back on the Road," Uber says:

We’re launching a $250 million driver stimulus to boost already high earnings for drivers. Boosted incentives and guarantees will help welcome existing drivers back to Uber and ensure first-time drivers do well as they learn the ropes.

In the same post on their website, Uber says that drivers make over $25 per hour in five cities before tips and the new incentives from the $250M program. Clearly, Uber is doing everything it can to entice drivers to get back on the road.

Airbnb

Airbnb fared poorly last week:

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Screenshot by the author

Entering into 2020 Airbnb was riding high. But Covid put the entire company at risk. Fortunately, the company's management responded brilliantly and revenues were down much less than expected during the Covid crisis.

Now that the end of Covid is in sight in the United States, Airbnb's largest market, its revenues are expected to recover. Prior to the pandemic, Airbnb was growing revenue 30% year over year. It pared its cost structure in response to the Covid crash so if it continues on this growth trajectory, more of these revenues will flow to the bottom line.

What will drive Airbnb's growth in 2021 and beyond? One large contributor is the savings rate in the United States. People are saving more money. That's not surprising since during the pandemic everyone was at home with nowhere to go. With their pockets flush with cash, people are expected to spend on travel as soon as shelter-in-place restrictions lift. This will benefit Airbnb.

Airbnb may also benefit from the new "work from anywhere culture." If you can work from anywhere, why not spend a week or a month in an Airbnb? While this market is a bit speculative at this point if Airbnb can sell itself to people who want a break from working at home that will provide a huge lift to its stock price.

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