Nomura analysts say that e-commerce companies and those with strong digital advertising businesses could be winners during a downturn.
The tech and digital media sectors have large exposure to advertising and discretionary consumer spending, two areas that are seen as high risk during hard economic times.
Nomura analysts say that e-commerce stocks are the "best to own in such an environment," singling out pet retailer Chewy as a smart play because the demand for pet products has shown to be resilient during recessions. "We expect larger e-commerce platforms and niche retailers whose end markets are less discretionary to outperform," the analysts say.
Signage for Chewy is seen on the trading floor ahead of their IPO at the New York Stock Exchange, June 14, 2019.The continued growth of digital services should give some technology and digital media companies the ability to outperform during a recession, but not every stock is well-positioned, according to analysts at Nomura Instinet.
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