These are tech’s 10 megatrends for 2022 — and the shares to purchase

Cloud computing

Prime choose: Amazon

Amazon
AMZN,
-0.75%
has loved the management place in Cloud for a while, and its AWS enterprise now tops $16 billion in income 1 / 4. Nevertheless, there have been two notable AWS outages in latest months. Extra broadly, Amazon’s inventory worth has badly lagged the S&P 500
SPX,
+0.16%
in 2021 with a acquire of solely 4.8% by way of Dec. 28. But on condition that enterprise cloud funding shouldn’t be anticipated to gradual in 2022 and that AWS is Amazon’s cash-cow enterprise, I count on the brand new 12 months to be higher for Amazon shareholders. 

Hold a watch out for: Oracle

Oracle
ORCL,
-0.58%
loved a considerable development 12 months, capped off by a $28 billion deal to acquire Cerner, which sells software program that helps medical doctors entry and analyze medical information. In 2021, Oracle offered a peek into its Cloud development, a enterprise now exceeding $10 billion yearly. Mixed with its robust inventory efficiency — up 37% by way of Dec. 28 — and stability in unstable markets, Oracle seems primed for extra development in 2022.  

Metaverse

Prime choose: Roblox 

Meta Platforms
FB,
-0.78%
(as soon as referred to as Fb) could also be receiving a lot credit score for the popularization of the Metaverse. Nevertheless, Roblox
RBLX,
-1.33%
has spent 17 years creating immersive experiences that could possibly be thought of the Metaverse. It claims that half of U.S. kids are on the platform and {that a} developer community of 10 million has created more than 24 million experiences on the Roblox platform.

Whereas Meta and others look to AR and VR to create the Metaverse expertise. Roblox has taken a extra real-world strategy to its gaming platform that has made it an actual chief within the area. This sensible strategy coupled with continued platform adoption ought to result in continued features because the popularization of the know-how results in extra traders seeking to get into the area.  

Hold a watch out for: NVIDIA

CEO Jensen Huang doesn’t acknowledge the Metaverse, however the firm
NVDA,
-0.93%
has been enjoying a pivotal function in creating this know-how with its Omniverse Platform. With 40 million builders in search of the instruments to unlock the Metaverse, NVIDIA’s know-how appears primed to be a crucial contributor, and we’ll almost certainly see NVIDIA proceed to run alongside this pattern in 2022.

5G

Prime choose: Qualcomm

5G has been a sizzling subject for a number of years, however the know-how gained steam in 2021 with greater than 560 million 5G handsets delivery worldwide. Qualcomm
QCOM,
+0.83%
advantages as each a number one chip maker and licenser of 5G applied sciences that goes into almost each 5G-enabled handset. The 12 months forward will likely be one other large 12 months for 5G. It received’t simply be handsets, but in addition automotive, IoT, infrastructure and extra–all of that are helpful to Qualcomm. 

Hold a watch out for: Apple

As a part of their 2019 settlement, Apple
AAPL,
+0.14%
nonetheless relies on Qualcomm for 5G chipsets and know-how as a part of its license settlement, which can last more than most suppose. Nevertheless, since rolling out its iPhone 13 with 5G, the corporate has shortly grow to be the world’s chief in 5G handset shipments, accounting for almost one-third of all 5G handsets worldwide. Whereas I’ve been crucial of the dearth of 5G mmWave in its worldwide models, I feel that may include the subsequent technology, which means extra gross sales, extra income and even happier shareholders.  

Digital transformation

Prime choose: Microsoft

Microsoft
MSFT,
+0.12%
has had a fantastic 12 months, with the replenish 53% although Dec. 28 and each income and revenue persevering with to develop each quarter beneath the management of Satya Nadella. Its portfolio from software program to cloud to gadgets is among the most, if not probably the most complete, to satisfy the wants of enterprises of their transition to digital. Even with rising rates of interest, inflation, and COVID-19, it’s arduous to see a state of affairs the place Microsoft’s inventory doesn’t proceed its ascent. 

Hold a watch out for: Alphabet 

With stock-market features of 67% thought Dec. 28, Google mother or father Alphabet
GOOG,
-0.24%

GOOGL,
-0.21%
has outperformed Microsoft. Whereas numerous its enterprise success will be attributed to its large advert income, Alphabet has quietly constructed up a contemporary productiveness suite that features Cloud, SaaS, enterprise functions, collaboration, and extra. That makes it a fantastic associate for firms seeking to expedite their digital transformation. With the advert enterprise underpinning the corporate, I consider Alphabet’s bets on enabling digital for enterprise and SMB will assist it hold its momentum in 2022. 

E-commerce and buyer expertise

Prime choose: Adobe

Amazon might really feel just like the low-hanging fruit right here, however I feel 2022 will likely be a giant 12 months for Adobe. The corporate’s inventory not too long ago took a significant hit following its earnings and investor day. Nonetheless, its stack of inventive and expertise applied sciences for entrepreneurs places it within the pole place for a powerful bounce again in 2022. Adobe’s expertise cloud, which enjoys a rising TAM to more than $200 billion by 2024, is one thing I really feel traders ought to hold a detailed eye on, as that is the place probably the most vital subsection of Adobe’s development will come over the subsequent few years.

Hold a watch out for: Twilio

Hit arduous by the expansion selloff, Twilio’s
TWLO,
-0.58%
inventory is down greater than 23% thought Dec. 28. Nevertheless, its know-how, developer ecosystem, and a number of other key acquisitions, together with Phase CDP, put the corporate in a superb place as one of many main platforms for enterprises looking for to ship best-of-breed buyer experiences by way of cellular and digital platforms. It’s removed from a certain factor, however the upside for Twilio is attractive. 

Enterprise collaboration

Prime choose: Microsoft

With 250 million month-to-month lively customers, Microsoft Groups is the hands-down winner right here. As the corporate diversifies to be extra than simply collaboration and the middle of the work expertise, it’s trying more and more tough for the competitors. Watch what Salesforce does with Slack, however proper now, Microsoft has a giant head begin.

Hold a watch out for: Zoom

A pandemic darling, Zoom Video Communications
ZM,
-0.68%
noticed its inventory shoot as much as $500 on the stay-at-home commerce, solely to fall again under $200, inflicting its deal to accumulate cloud contact-center software program agency Five9 to disintegrate. With all of that in thoughts, the corporate nonetheless enjoys an enormous person base and powerful double-digit development after surpassing $1 billion 1 / 4 in income. It is usually diversifying with its platform into hybrid occasions and asynchronous messaging. As I see it, Zoom shares went up too quick after which went down too quick. I feel there is a chance right here for Zoom and its traders.  

Synthetic intelligence (AI)

Prime choose: NVIDIA

This one isn’t even shut, and traders have had their say as NVIDIA’s stock-market value has gone north of $760 billion and on its way to $1 trillion. Buyers have shaken off its more and more unlikely bid to accumulate ARM, and that’s as a result of development is so good with out it. Whether or not it’s AI for gaming, Metaverse, dialog, suggestions, or automotive, the corporate presents the software program, {hardware}, and frameworks wanted to implement AI at scale. 

Hold a watch out for: Amazon

Amazon has gone all-in on its homegrown chipmaking, and it’ll bear fruit for the corporate in 2022. Whereas AWS’s portfolio of AI and machine studying companies presents GPUs from the likes of Intel and NVIDIA, the corporate has constructed a future the place its presents extremely aggressive or market-leading efficiency for AI coaching and inference. Whereas I don’t see AWS going toe-to-toe with NVIDIA to be the “AI” firm, I do suppose its fast capabilities to ship enterprise-oriented digital servers within the cloud, referred to as situations, will assist hold AWS rising close to or above 30% fee it has loved over the previous 12 months.

Autonomous car/ADAS know-how 

Prime choose: Intel Mobileye

I centered on know-how makers that stand to win large from the curiosity in autonomous autos that has despatched names like Lucid
LCID,
+0.16%
and Rivian
RIVN,
-3.34%
to stock-market values above GM, BMW, Volkswagen and others regardless of barely having any income. I consider Mobileye, now presently a part of Intel
INTC,
+0.21%,
is about to ship large returns to shareholders in 2022. With the recent announcement that it will spin off its Mobileye business that it acquired less than five years ago, Intel stands to unlock appreciable worth by way of this deal. With greater than 100 million eyeQ ADAS models shipped by Mobileye thus far, I consider this could possibly be a fair greater winner for traders who get in on Mobileye’s impending IPO in addition to for Intel, which is able to stay Mobileye’s largest shareholder.

Hold a watch out for: Qualcomm

With latest design wins from the likes of BMW and GM, Qualcomm’s automotive design pipeline has swelled above $10 billion and stands to grow to be the corporate’s subsequent billion-dollar annual enterprise. The corporate’s Snapdragon Trip platform is a full stack of parts to handle superior driver help techniques, or ADAS, telematics and infotainment, and it may be achieved on an open platform that makes it simpler for giant auto makers to undertake and iteratively improve their autos on a shorter time horizon.

I don’t suppose Qualcomm’s automotive enterprise has been extremely appreciated by traders as the corporate’s stock-market worth has surged above $200 billion, and that could possibly be an excellent factor for its share worth in 2022. 

Semiconductors 

Prime choose: AMD

Very like NVIDIA has grow to be the darling of AI, AMD
AMD,
-2.86%
has grow to be one of the vital thrilling names in semiconductors; the corporate has taken market share in laptops, and maybe extra essential, servers over the previous few years.

The expansion beneath CEO Lisa Su has been nothing wanting exceptional. The inventory has climbed 67% by way of Dec. 28, and the corporate claimed a ten% market share within the datacenter server area for the primary time since 2007. That development has been crucial to the corporate’s top-line development and its growing margins, making it much more engaging to its traders. 

Hold a watch out for: Marvell

It looks like Marvell
MRVL,
+0.60%
CEO Matt Murphy can do no flawed. The chipmaker’s turnaround has been underpinned by stable development in key secular traits, together with 5G, automotive, and datacenter. In 2021, Marvell went from being part of a large swath of semiconductor names to one of many must-own names for those who share my perception that semiconductors will eat the world. The inventory almost doubled in 2021 and has not too long ago hit an all-time excessive; depend on extra features in 2022.   

Enterprise software program

Prime choose: Salesforce

This one was a detailed name, on condition that Microsoft and Oracle each have had a stable 12 months for his or her enterprise software program. Nevertheless, Salesforce
CRM,
-0.31%
has been terribly secure in its development, and I’m more and more optimistic about its platform, Hyperforce, and the way that may broaden its development trajectory. The corporate has made a number of vital acquisitions in MuleSoft, Tableau and, most not too long ago, Slack, and I feel the very best of Salesforce is but to return. Its humble 15% stock-market acquire by way of Dec. 28 makes it stand out as a sensible choose for a pop in 2022. 

Hold a watch out for: SAP

This title might not exude pleasure, however SAP
SAP,
-0.81%

SAP,
-1.06%
touts greater than 425,000 prospects, and this implies robust recurring income. Now it’s making an actual push into the cloud, and that transition makes SAP an attention-grabbing development alternative in 2022. With 77% of its income falling into the “predictable” class and mid-double-digit (20%) cloud development, there’s a actual alternative for upside if its cloud transformation continues to take form.

Daniel Newman is the principal analyst at Futurum Research, which gives or has offered analysis, evaluation, advising, and/or consulting to Salesforce, SAP, Marvell, NVIDIA, Intel, Amazon and dozens of different firms within the tech and digital industries. Neither he nor his agency holds any fairness positions with any firms cited. Comply with him on Twitter @danielnewmanUV.

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