The pandemic’s surprising winners and losers

By James Yardley on 11 March 2026 in Equities

It is six years since the first Covid lockdown in the UK, as the government sought to deal with the virus sweeping Europe. While its short-term impact is now clear – market volatility, ballooning government debt – its long-term impact is still being assessed. It has had lingering implications across a range of sectors.

In that febrile environment – and after an initial bout of volatility – specific sectors rallied strongly, including smaller companies, clean energy and biotechnology. All were expected to be beneficiaries of lockdowns, and a renewed focus on healthcare. However, this initial rally was followed by precipitous falls from which all three areas had only just started to recover when the Iran crisis hit.

Nevertheless, the S&P 500 has more than doubled since the Covid years. Rather than biotechnology or clean energy, AI has been the story of the post-Covid world and it is clear that the pandemic contributed to its growth. At the time, the World Economic Forum said:

In retail and hospitality, the pandemic forced the adoption of no-contact pick up, delivery and reservation systems that have been sustained to this day. In education, online learning became commonplace. Many businesses adopted remote working models, with implications for the commercial property sector and technology requirements.

The healthcare sector has been impacted, but perhaps not in the way that was initially expected. At the time, it was hoped that it would usher in a new wave of drug discovery. In particular, mRNA vaccines looked set to change the world, not only providing a vaccine for Covid, but also potential cures for cancer. Life sciences became the latest ‘hot’ sector.

Instead GLP-1s have taken centre stage, perhaps to rid everyone of the extra pounds gained during the lockdowns. Moderna, the poster-child for mRNA technology, saw its share price slump from highs of 464p per share, to its current level of just 54p*.

The healthcare sector has had to contend with some significant hurdles since Covid. There has been considerable uncertainty around drug pricing in the US, which was only resolved through agreements between individual drugs companies and the US government. The appointment of vaccine sceptic Robert F Kennedy Junior as secretary of health and human services has also weighed on the sector.

Nevertheless, there has been a revival in the sector in recent months and investors are starting to recognise that developments during Covid accelerated drug innovation. Global investors have started to take a renewed interest in the sector. Rob Lovelace, co-manager on the Capital Group New Perspective fund, says:

He says healthcare could be positively impacted by AI. “Today, fewer than 5% of drugs under development are successful. That’s a terrible success rate. If AI can help identify earlier in the process which drugs are likely to fail and those more likely to succeed, we could potentially raise that success rate to 10%, which is still pretty terrible, but it’s double the success rate we have now. That is likely to lead to an acceleration in drug discovery.”

He says that we are getting closer to actual cures for certain diseases. Health remains a priority area for most governments. “The money is there. It’s just a matter of finding its way to the right places.”

Nicola Dormehl, investment specialist on the Orbis Global Balanced fund, says: “If you go back to Covid, so much money was channelled to biotech, but since then sentiment and capital has dried up as investors have been lured by things like AI. When you see the capital cycle turn, that’s when contrarian investors like us get excited. In biotech, these companies offer some promising and innovative breakthroughs, but there’s no price being placed on the future.” She adds that this part of the market should also be relatively defensive.

Clean energy has been a tough sector. Having soared during the pandemic, it was clear that prices over-reached. The past few years have been grim for the sector, which was particularly impacted by higher inflation and by an unfriendly US administration. Nevertheless, prices are now at rock bottom. Bellwether groups such as Vestas Wind Systems and Orsted are down 27.5% and 84.6% over the past five years*.

Some of the regulatory concerns have been resolved. Will Argent, manager of the TM Gravis Clean Energy Income fund, says:

He also points to the reformed outlook for power demand globally, “reinforced by the rise of AI and data centres and strategic partnerships between hyperscalers and large-scale power generators, whilst the electrification of heat and transport remain key drivers of global electricity demand.” The Iran crisis has once again shown the perils of reliance on fossil fuels and may prompt a reappraisal of the renewable energy sector.

Covid changed the landscape for a lot of sectors and its repercussions are still being felt today. Its impact was not confined to equity markets. Increased borrowing has left Western nations indebted, and governments in thrall to bond markets. In the longer term this may change the balance of power in the global economy, with many emerging markets now in a stronger position to weather economic shocks. Six years on, we have seen the short-term consequences of the pandemic, but the long-term consequences will continue to evolve.

*Source: as at 9 March 2026