Pro: ‘buy names that supply tech to small businesses’

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Companies that supply technology to small businesses are a great pick for investors interested in betting on post-pandemic recovery, says GGV Capital’s Jeff Richards.

What stocks does Richards like that match the criteria

Names that match the criteria and are on his list include Square, Shopify, RingCentral, and Zendesk. Speaking with CNBC’s Deirdre Bosa on “TechCheck”, Richards said:

This is a more interesting bet because who benefits as people go out, eat in restaurants and do things live and in person? It should be the small businesses. And one way to bet on that is by buying these names that supply tech to those companies.

At present, small businesses account for roughly 40% of the U.S. GDP and employs about 60% of the Americans. The Vanguard Small-Cap Index Fund ETF is down 13% for the year.

Many of his stock picks have come down sharply in 2022

According to Jeff Richards, the stocks he picked are particularly attractive considering most of them have come down sharply since the start of the year 2022. He added:

Over the long run, we’re seeing positive signals with small businesses. We saw as many as a third of workers miss shifts in Q4 due to the omicron variant. We’re now seeing that go away and a rise in purchasing behaviour for tech in small businesses.

The GGV Capital Managing Partner is also bullish on cloud names like Twilio and Datadog and expects these to be lucrative bets for the long-term investors. Both companies are reporting quarterly results later this week.

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