By Daniel Newman
It’s been a turbulent year for stock markets – record levels across all major indexes despite an onslaught of economic worries and what feels like never-ending variants of Covid-19. Now it’s time to look ahead to 10 major technology trends and which companies show the most promise to win big in 2022.
Top pick: Amazon
Amazon /zigman2/quotes/210331248/composite AMZN +0.19% has enjoyed the leadership position in Cloud for some time, and its AWS business now tops $16 billion in revenue a quarter. However, there have been two notable AWS outages in recent months. More broadly, Amazon’s stock price has badly lagged the S&P 500 /zigman2/quotes/210599714/realtime SPX -0.58% in 2021 with a gain of only 4.8% through Dec. 28. Yet given that enterprise cloud investment is not expected to slow in 2022 and that AWS is Amazon’s cash-cow business, I expect the new year to be better for Amazon shareholders.
Keep an eye out for: Oracle
Oracle /zigman2/quotes/202180826/composite ORCL -1.84% enjoyed a substantial growth year, capped off by a $28 billion deal to acquire Cerner , which sells software that helps doctors access and analyze medical records. In 2021, Oracle provided a peek into its Cloud growth, a business now exceeding $10 billion annually. Combined with its strong stock performance — up 37% through Dec. 28 — and stability in volatile markets, Oracle looks primed for more growth in 2022.
Top pick: Roblox
Meta Platforms /zigman2/quotes/205064656/composite FB -0.49% (once known as Facebook) may be receiving much credit for the popularization of the Metaverse. However, Roblox /zigman2/quotes/223883423/composite RBLX +5.53% has spent 17 years creating immersive experiences that could be considered the Metaverse. It claims that half of U.S. children are on the platform and that a developer community of 10 million has created more than 24 million experiences on the Roblox platform.
While Meta and others look to AR and VR to create the Metaverse experience. Roblox has taken a more real-world approach to its gaming platform that has made it a real leader in the space. This practical approach coupled with continued platform adoption should lead to continued gains as the popularization of the technology leads to more investors looking to get into the space.
Keep an eye out for: NVIDIA
CEO Jensen Huang doesn’t acknowledge the Metaverse, but the company /zigman2/quotes/200467500/composite NVDA +1.10% has been playing a pivotal role in developing this technology with its Omniverse Platform. With 40 million developers looking for the tools to unlock the Metaverse, NVIDIA’s technology seems primed to be a critical contributor, and we will most likely see NVIDIA continue to run alongside this trend in 2022.
Top pick: Qualcomm
5G has been a hot topic for a few years, but the technology gained steam in 2021 with more than 560 million 5G handsets shipping worldwide. Qualcomm /zigman2/quotes/206679220/composite QCOM +0.09% benefits as both a leading chip maker and licenser of 5G technologies that goes into nearly every 5G-enabled handset. The year ahead will be another big year for 5G. It won’t just be handsets, but also automotive, IoT, infrastructure and more–all of which are beneficial to Qualcomm.
Keep an eye out for: Apple
As part of their 2019 settlement, Apple /zigman2/quotes/202934861/composite AAPL -2.46% still depends on Qualcomm for 5G chipsets and technology as part of its license agreement, which may last longer than most think. However, since rolling out its iPhone 13 with 5G, the company has quickly become the world’s leader in 5G handset shipments, accounting for nearly one-third of all 5G handsets worldwide. While I’ve been critical of the lack of 5G mmWave in its international units, I think that will come with the next generation, meaning more sales, more revenue and even happier shareholders.
Top pick: Microsoft
Microsoft /zigman2/quotes/207732364/composite MSFT -0.37% has had a great year, with the stock up 53% though Dec. 28 and both revenue and profit continuing to grow every quarter under the leadership of Satya Nadella. Its portfolio from software to cloud to devices is one of the most, if not the most comprehensive, to meet the needs of enterprises in their transition to digital. Even with rising interest rates, inflation, and COVID-19, it’s hard to see a scenario where Microsoft’s stock doesn’t continue its ascent.
Keep an eye out for: Alphabet
With stock-market gains of 67% thought Dec. 28, Google parent Alphabet /zigman2/quotes/205453964/composite GOOG -1.47% /zigman2/quotes/202490156/composite GOOGL -1.35% has outperformed Microsoft. While a lot of its business success can be attributed to its massive ad revenue, Alphabet has quietly built up a modern productivity suite that includes Cloud, SaaS, business applications, collaboration, and more. That makes it a great partner for companies looking to expedite their digital transformation. With the ad business underpinning the company, I believe Alphabet’s bets on enabling digital for enterprise and SMB will help it keep its momentum in 2022.
E-commerce and customer experience
Top pick: Adobe
Amazon may feel like the low-hanging fruit here, but I think 2022 will be a big year for Adobe. The company’s stock recently took a significant hit following its earnings and investor day . Still, its stack of creative and experience technologies for marketers puts it in the pole position for a strong bounce back in 2022. Adobe’s experience cloud, which enjoys a rising TAM to more than $200 billion by 2024 , is something I feel investors should keep a close eye on, as this is where the most significant subsection of Adobe’s growth will come over the next few years.
Keep an eye out for: Twilio
Hit hard by the growth selloff, Twilio’s /zigman2/quotes/205796518/composite TWLO +4.31% stock is down more than 23% thought Dec. 28. However, its technology, developer ecosystem, and several key acquisitions, including Segment CDP, put the company in an excellent position as one of the leading platforms for enterprises seeking to deliver best-of-breed customer experiences through mobile and digital platforms. It’s far from a sure thing, but the upside for Twilio is enticing.