- Technology has a rude awakening in the year 2022.
- Many leaders are still growing and making profits.
- There are gems worth studying at a rare discount.
Investing in technology seemed pretty easy between 2011 and 2021. You just had to buy growing companies that were creating new business models or sectors, and sit back and watch them progress.
But everything changed in 2022: technology became obsolete, corporate profits mattered, and we’ve all had to learn or relearn lessons about what works in the marketplace.
What are the biggest lessons? There is nothing new under the sun: the tech mania over the past decade echoes the internet boom/slowdown and even older tech cycles.
The good news? The best companies will survive and thrive. And now many of them are selling thanks to the bear market in.
For Cyber Monday, here are five tech company names picked by our picks Investing Promore specificallyGem technology screen, which is searching the world for diamonds in the rough technology market. These are the examiner-provided measures verified by our analytics team that will help you get on the safe side of your next technology course.
Because although the economic downturn is difficult, a new day will come, and technology will be at the forefront.
Microsoft
Microsoft Corporation (NASDAQ:) remains one of the largest companies in the world, despite its value dropping more than 30% in the past year. Although it’s not cheap, a leading cloud service provider like Azure and indefinitely used classic software like Microsoft Office is rarely cheap. The company trades with the lowest price-to-earnings ratio in five years, while posting excellent profitability metrics and generating tons of cash. It may not be very successful overnight, but this could be a rare opportunity to put one of the best companies in the world up for sale.
Microsoft’s historical price-to-earnings ratio
source : Investing Pro
Taiwan Semiconductor
The world’s largest semiconductor maker — all the computer chips that go into iPhones, computers and everything else — had a tough year, trading as much as 60% below 52-week highs. Its leadership position and constant need for these computer chips in everything suggests that Taiwan Semiconductor Manufacturing (NYSE:) still has plenty of room for growth. And if you need proof of the company’s strength, even more telling is the fact that Warren Buffett and Berkshire Hathaway (NYSE:) have opened a position in the company.
Taiwan semiconductor fair value
source : Investing Pro
from Broadcom
Broadcom Inc (NASDAQ:) is another major player in the semiconductor space. It has acquired many companies on its way to leadership in a variety of sectors within semiconductors. That strength has allowed Broadcom to pay a big dividend — 3.2% at current prices — while increasing revenue at a compound annual rate of 31% over the past decade, and increasing earnings per share by 23% annually. Although growth gets more difficult as you get bigger, Broadcom is in the process of buying another major player in the software business, VMware Inc. (NYSE:) , in order to diversify its revenue and maintain its momentum, making it an attractive option for long-term investors.
Broadcom dividend
source : Investing Pro
Adobe
Speaking of software acquisitions, Adobe Systems Incorporated (NASDAQ:) stock fell when the maker of Photoshop and a number of other software tools announced the $20 billion purchase of Figma, a fast-growing young company in the field. That announcement, along with a lackluster earnings report, caused Adobe’s stock price to drop more than 50% from its 52-week high, even after the rally. But Adobe is as profitable as any company in the industry and has pioneered the transition to software-as-a-service models. The addition of Figma could trigger a new growth cycle, which could propel the stock into the next growth cycle, despite market skepticism about the deal.
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source : Investing Pro
Video zoom
Zoom Video Communications (NASDAQ:) may look like the last company to invest in, with the pandemic still behind us. This was the first example of the crazy rise and fall of a pandemic winner. But while workers grew tired of taking Zoom calls, the company continued to increase profitability and expand sales beyond the typical Zoom subscription to larger business deals. Microsoft Teams is a huge threat, but Zoom’s profits have continued to grow and its valuation is finally reasonable. It may never reach its pandemic peak, but there may still be a good tech investment to be made here.
source : Investing Pro
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The past three years have shown how quickly things can change in the technology sector. The 2020s may not be as good for tech companies as the 2010s. In fact, it probably is.
At the same time, there are many companies that have built a strong market position, which will continue to grow, and who have also proven profitable business models. These five companies, hand-picked Investing ProIt can be a good starting point for a technology investor looking to ride the next wave, or a general investor looking for deals.
disclosure: I’m long on VMWare, Zoom, Berkshire Hathaway, and Taiwan Semiconductor.