Despite experiencing ups and downs in 2023, work-from-home stocks continue to offer significant upside in our changing economy. The pandemic-induced remote work shift saw an average worker spending over 60% of their workdays from home in 2020. And, in 2023 it hit 25%, which remains firmly entrenched. So, this suggests it will stay this way or increase, marking a substantial fivefold increase from pre-pandemic levels in 2019.
Work-from-home stocks encompass companies providing tools, technologies, and services that support and enhance the remote working experience. True, some of these stocks have retreated from their peak values as global conditions return to normalcy. Yet, they still present considerable growth potential. This is especially true as employment trends continue to evolve. It’s an indicator that work-from-home options are here to stay.
Apple (AAPL)
Apple (NASDAQ:AAPL) is on the verge of reaching an unprecedented market capitalization of $4 trillion next year. This achievement is at least partially fueled by work-from-home product popularity.
But new inroads into augmented reality (AR) in the workplace could accelerate Apple’s rapid growth. The company already posted notable success with its Vision Pro headsets. They sold around 200,000 units despite the hefty price tag of $3,499. This initial success is expected to spur further sales. As the product demonstrates its work-from-home value and production scales, it reduces costs.
Of course, concerns exist that Vision Pro could start to undercut sales of other Apple products. In particular, tablets and iPads are already experiencing declining sales. Apple finds itself at a critical juncture. It anticipates the stabilization of Vision Pro sales while assessing whether its AR reality technology will be a passing trend. Also, it could be a transformative product changing the way we work like the iPod was in the early 2000s. Regardless of the outcome, Apple currently stands as the leading AR stock. It offers investors a prime opportunity to engage with this burgeoning market through a tried and tested blue-chip company.
Steelcase (SCS)
Spending the day seated and immobile at your computer does a disservice to your well-being. Researchers often compare prolonged sitting’s health implications to smoking, suggesting a significant impact on life expectancy. While the accuracy of this comparison remains a topic of debate, the consensus is clear.
Being active and mobile is far preferable to remaining sedentary in an office chair for hours on end. Yet, for the work-from-home segment, sitting is a fact of life. Many look for comfort and optimized posture, and few companies match the caliber of seating solutions Steelcase (NYSE:SCS) offers.
Steelcase specializes in premium, corporate-level office furnishings. Imagine a business tasked with equipping a series of cubicles or conference rooms. Steelcase represents the high-end option in this market. With the rise of remote work, more work-from-home employees choose Steelcase for its robust product lineup. It enhances their home offices with top-tier, comfortable seating options.
Over the last five years, Steelcase navigated challenging times indeed. The shift toward remote working altered its foundational business model and interest rates increased, forcing significant cost reductions. Yet, for those eyeing potential under-the-radar investments within the remote work sector, Steelcase presents a compelling option. This will be especially true if it pivots to serve the growing home office market more directly.
Upwork (UPWK)
As remote work expands, many work-from-home staffers turn to side gigs for extra income. Further, some even leave their traditional jobs to venture into freelancing full-time. Upwork (NASDAQ:UPWK) is a work-from-home stock perfectly aligned with this trend.
From a user perspective, some of Upwork’s decisions and initiatives tend to be confusing and frustrating. But, from an investment viewpoint, Upwork’s position in the freelancer/client marketplace is unparalleled. It commands over 50% of the total market share in the vast freelancing industry. Further, they attract a clientele that generally offers higher pay than that found on platforms like Fiverr International (NYSE:FVRR).
Upwork navigated the changing economic landscape with agility, achieving increased profitability to ensure its survival. The company celebrated its third-ever profitable quarter in its latest earnings report, beating analyst expectations by posting a $0.20 EPS. Furthermore, the gross service volume has remained consistent since early 2021. It’s a testament that Upwork’s business model is resilient even during economic downturns.
Yet, the most significant challenge facing Upwork is expanding its enterprise client base. Growth in this segment has seen a slowdown recently. Possibly, this is due to large corporations reducing their freelance budgets or hiring talent directly. However, if Upwork adjusts its enterprise services to attract and retain big clients more effectively, the potential for growth could be immense.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.