5 Best Tech Stocks to Buy in January 2022

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In 2021, the S&P 500 outperformed the tech-heavy Nasdaq index. Nasdaq’s underperformance was largely led by the steep losses in stay-at-home companies. However, US tech stocks have been among the best performing asset class over the last decade.

As investors realign their portfolios in 2022 amid the changing macroeconomic scenario, where on one hand we have slowing growth and on the other hand we could see the Fed raise interest rates, here are the five tech stocks that you can consider in January 2022.

  1. Uber (NYSE: UBER)

uber is a good tech stock for 2022

Uber stock underperformed the markets by a wide margin in 2021. However, it has come off the 52-week lows that it hit in mid-December. Along with the business disruption caused by the COVID-19 pandemic, Uber’s price action has also been impacted by the crash in Didi stock, where it is the second-largest stockholder behind SoftBank. The Chinese ride-hailing company, where Uber acquired a significant stake in exchange for selling its Chinese operations, is delisting from the US within months of the IPO. What was meant to be value unlocking for existing investors turned out to be quite the opposite as Didi’s market cap is now way below its pre-IPO private market valuation.

Wolfe lists Uber among the top tech stocks for 2022

Wolfe has listed Uber as a top tech stock for 2022. The brokerage sees a recovery in Uber’s ride-hailing business and continued growth in the Uber Eats business. Notably, Uber has been working to improve its profitability and has exited several markets as part of the exercise. It has also exited the cash-burning autonomous driving and flying taxi business. The company’s valuations also look reasonable and it looks among the best tech stocks to buy for 2022.

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  1. Alphabet (NYSE: GOOG)

With a gain of 65%, Alphabet was the best performing FAANG stock of 2021. The FAANG pack, which has led the markets for the last many years looked weak in 2021 amid concerns over slowing growth and increasing regulatory scrutiny. However, GOOG managed to overcome the pessimism amid the steep rise in its revenues from 2020 lows. The company is also benefiting from higher spending on digital advertising.

Wall Street analysts see more upside in GOOG stock

Wall Street analysts continue to remain bullish on GOOG stock and 46 of the 48 analysts covering the stock have a buy rating while two analysts have a hold rating. The stock has a median target price of $3,350 which is an upside of over 16%.

Alphabet’s valuations look reasonable despite the surge last year and its NTM (next-12 months) PE multiple of 26.5x is slightly below the average three-year multiple of 27.3x. GOOG is among the best tech stocks to play the digital transformation and the stock should continue its good run in 2022 as well.

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  1. Meta Platforms (NYSE: FB)

Meta Platforms stock came off its 2022 highs. The regulatory woes simply don’t seem to end for the company and we also had the whistleblower controversy last year. But then, controversies and Facebook have generally gone hand in hand. While there are still regulatory risks associated with the stock, and we have increased competition in the social media space amid the rise of conservative social media companies, all the social media platforms that Meta Platforms has have an undeniable lead and network effect.

Meta is a good tech stock to play metaverse

Facebook changed its name to Meta Platforms so that the company’s name reflects the company’s new strategy. Metaverse could be the next growth driver for Facebook and the company is moving fast to get a first-mover advantage. If you are looking to play the metaverse industry, Meta Platforms is one tech stock that should be on your radar.

The stock trades at an NTM PE of 24.7x which makes it the cheapest FAANG stock. The company has a strong growth outlook and analysts expect the company’s sales to rise 19% this year.

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  1. Pinterest (NYSE: PINS)

2021 wasn’t a good year for social media companies and Pinterest is no exception. The stock is down sharply over the last year and Wall Street is also mixed on the stock. Yesterday, Guggenheim downgraded the stock expressing concern over the sagging user growth. However, today Piper Sandler upgraded the stock.

“While PINS did lose users sequentially [from its second quarter to the third quarter], comps should ease in ’22. Also, [monthly active users] are not created equal: comments suggest headwinds were driven mostly by non-mobile users, which contribute less to revenue. Mobile users on the other hand generate a ‘significant majority’ of revenue and have grown 2Q/3Q,” is said in its note.

PINS looks like an attractively priced tech stock in the social media industry

Piper Sandler finds PINS an attractively valued tech stock even as it lowered the target price from $58 to $53. It said, “Shares now look oversold trading in the mid-30s from a peak of high 80s. At current prices, PINS is trading at [less than six times] ’23 [enterprise value]/Sales versus an average FY2 EV/Sales closer to 10x since 2019.”

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  1. Amazon (NYSE: AMZN)

Amazon stock was the worst-performing FAANG stock of 2021. However, most brokerages are bullish on the stock and RBC joined the long list of companies that have added the stock as a top idea for 2022. “The company’s unmatched scale and advantage in verticalized e-commerce combined with its industry-leading cloud business gives it many shots on goal for future growth opportunities in new verticals,” said RBC in its note.

amazon is a top 2022 tech stock

Amazon is among the best tech stocks for 2022

Cowen, Bank of America, Jefferies, and Goldman Sachs are among the other brokerages that have listed Amazon as a top idea for 2022. Amazon is among those tech stocks that have a secular growth path. While Apple’s topline growth is expected to taper down to single digits, Amazon is among those companies which can deliver strong double-digit revenue growth given the exposure to high growth industries like cloud, e-commerce, streaming, and digital advertising. To be sure, the company is facing strong competition in all the verticals. However, Amazon has an impeccable network effect and value proposition which is hard to emulate.

If you are looking to buy a tech stock that you can hold for decades, Amazon is one name that should you on your watchlist.

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About Mohit PRO INVESTOR

Mohit Oberoi is a freelance finance writer based in India. He has completed his MBA in finance as a major. He has over 15 years of experience in financial markets. He has been writing extensively on global markets for the last eight years and has written over 7,500 articles. He covers metals, electric vehicles, asset managers, tech stocks, and other macroeconomic news. He also loves writing on personal finance and topics related to valuation.