The year 2022 was a difficult test for all technology companies, the gradual relaxation of pandemic measures caused some companies that assimilated to the unfavorable situation to have to change their operation again. In addition, the world is experiencing a mild recession and high inflation, which makes people more cautious when investing in new technological devices. Tech companies have seen their stocks decline for the most part, but at the same time, they are gearing up for 2023 and focusing on areas that will help them offset the decline.
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Amazon
It is a leading online retailer and also a provider of cloud infrastructure computing . It is the second worst profitably among the “Big Five”, as many people began to prefer shopping in brick-and-mortar stores to online stores after the lockdown. The company therefore laid off many employees due to the decline of the boom after the pandemic, and logistics remained unused to the full extent. So, for 2022, shares fell by 49.64%. *
In the last quarter, Amazon Web Services (AWS) and advertising money showed high revenues (27%). One of Amazon’s products is Alexa, one of the most widely used forms of artificial intelligence, which is an increasingly popular term in the tech world. In addition, the company bought OneMedical , which opened the door to the world of health care, the chain of Whole stores Food and a company for the production of robotic Roomba vacuum cleaners . Overall, it is very diversified, it provides its own Amazon Prime streaming service, so it represents an interesting investment for 2023.
Amazon’s stock movement over the past five years. (Source: Trading Economics ) *
Apple Inc. _ (AAPL)
It is a world-renowned company engaged in the development of technologies in the field of mobile phones, software and smart devices. Its founders, Steve Jobs and Steve Wozniak , started in 1976 in a modest garage in California, have since grown to become the most valuable public company in the world with a market capitalization of more than two trillion dollars. It currently represents 6.7% of the S&P index.
Loyalty of regular customers ensures a growing range of services and thus creates a stable ecosystem of the company. 67% of users do not consider switching to a competing Android. As a result, Apple ranks high in technology indexes and is also part of the FAANG group.
In the last five years, it had an average annual return of 28.8%. The company’s value has decreased by 29.68% in the past twelve months and is expected to decrease to $117.81 per share in the next year. * [1] Apple is still in a bubble since the end of the pandemic, the latest iPhone 14 model did not have much success, but sales of the new Mac increased by 25%. Double digits in value growth next year would be very surprising. [2]
Apple’s stock movement over the past five years. (Source: Trading Economics ) *
Alphabet Inc. _ (GOOG)
It is the parent company of Google and the popular Android operating system for smartphones. Undoubtedly, it ranks first in the advertising business. This conglomerate is mainly focused on internet services and marketing.
Google Cloud is the flagship of the company, with an ever-increasing amount of data, it provides more and more storage. Revenues of $19 billion represent a 39% year-over-year increase. Although it showed a 10% decline in the third quarter, it is projected to be worth $1.7 trillion by 2029. Google search is still the most popular internet search engine and the number of its users continues to grow. In 2022, Google shares fell 39%. *
Alphabet ‘s income is advertising, which is falling mainly due to inflation, as less purchasing power does not require as much marketing. Merchants are more financially cautious in this regard, the advertising business generates a total of 80% of Alphabet ‘s revenue . In recent years, the TikTok platform belonging to the ByteDance company has become an increasingly large competitor . The disadvantage of investing in Alphabet is poor diversification, recession and also a strengthening dollar, as profits come to the company from all countries.
Alphabet ‘s stock movement over the past five years. (Source: Trading Economics ) *
Microsoft (MSFT)
This dominant software company is best known for its Windows operating system and Office software. Microsoft is the second largest provider of cloud infrastructure, after Amazon. Worldwide, Microsoft is installed on more than a billion devices, produces video games, among other things, and boasts its own Xbox game console. As a technology company, it’s understandable that Microsoft has its own cloud . It’s called Azure , and like Amazon and Google, this service will provide the company with high revenues in the long run.
This year, Microsoft bought one of the biggest game companies, Activision Blizzard for $68.7 billion. Competitors for the Xbox gaming console are Sony and its PlayStation platform, this deal will give Microsoft a better position in the gaming industry. In addition, Netflix has decided to provide an ad-supported version of its streaming service to Microsoft.
Since January 2022, Microsoft’s value has fallen by 30.37% due to less interest in computers, which is caused by the rising cost of living. * 2023 may be bright for Microsoft thanks to the diversification mentioned above. [3]
Microsoft’s stock movement over the past five years. (Source: Trading Economics ) *
Samsung Group (005930)
This Korean technology giant is Apple’s biggest competitor in consumer electronics, compared to it it has a wider portfolio, it produces televisions, hard drives, cameras, but the biggest source of revenue is smartphones. In addition, he is an important representative in the field of healthcare. It is difficult for American investors to buy Samsung shares as it is traded on the Korean stock exchange KRX. In Europe, it has certificates (GDR), American trading certificates (ADR) do not. Samsung shares are down 24.32% over the past year. *
Interest in new smartphones and televisions is expected to be lower in 2023 due to inflation and weaker purchasing power. On the other hand, interest in semiconductor products and chips will increase, which would mean a brighter future for Samsung. [4] Former President Donald Trump and his social network Truth was supported by all Samsung devices, now it is expected to return to Elon’s bought Twitter Muskom , where he has more than 80 million followers compared to 4.3 million on Truth . Even if interest in smartphones in 2023 is still questionable, as a richly diversified technology company, Samsung can focus its efforts elsewhere in tougher times.
Tencent Holdings (700)
It is a Chinese company based in Shenzhen, a tech conglomerate best known for owning the messaging app QQ and also the third largest social network in the world, WeChat , with over 900 million active users. In addition, he owns a significant stake in Epic Games , which created the world’s favorite video game Fortnite. Tecent Holdings shares are traded on NASDAQ and the Hong Kong Stock Exchange. Since the company is based in China, this may deter some investors. Nevertheless, it became the first Chinese technology company to cross the market capitalization mark of half a billion dollars. The holding group also owns Tencent Music and Tencent Games, the largest company in the video game industry. Last year’s data says that this company’s stock is down 19.91%. *
Fortnite is a popular and highly developed game around the world, yet only one game has been approved by Tencent since April when the Chinese government resumed approving the games. He owns a large stake in Metuian, which could be compared to China’s Amazon. In the coming year, he plans to diversify his investments and add other companies to the existing Kuaishou Technology and Pinduoduo Inc.
Tencent Holdings’ stock movement over the past five years. (Source: Trading Economics ) *
Meta Platforms (FB)
It includes Facebook, the largest social media company with more than two billion daily active users across Facebook, Instagram, Messenger and WhatsApp. The company sees the future mainly in virtual reality.
Over the past year, its shares have fallen by 62.15%. * The advertising business in 2022 generally did not bring high sales, for Meta it represents 98% of the total revenue in each quarter, the company is essentially dependent on advertising. The Reality Labs project , under the auspices of CEO Mark Zuckerberg , which focuses on the future of virtual reality, does not show the expected success. The release of their flagship headset in 2023 would see costs rise from $85 billion to $101 billion, currently generating just 1% of revenue. Meta Horizon’s World The platform had around 300,000 users in the first half of 2022, the number dropped to 200,000 at the end of the year.
The number of Meta users in general continues to grow, with almost 3.65 billion currently using at least one Meta application, a figure that represented a four percent increase in the second quarter of 2022. In addition, Meta is the cheapest purchase of the FAANG group, which will be further advantageous due to the layoff of more than 11,000 employees. Zuckerberg is taking significant steps to make his company the most interesting investment possible, and with the Instagram platform he is trying to compete with TikTok .
Meta ‘s stock movement Platforms for the last five years. (Source: Trading Economics ) *
Cisco Systems (CSCO)
It is the dominant supplier of hardware for the networks that make up a substantial part of the Internet. It also provides other network, software, hardware, cloud and cyber security solutions.
The coming period will be more difficult for Cisco due to the global shortage of components. The modernization of Wi-Fi6 and the continuous expansion of 5G networks, including the increasing consumption of bandwidth and solutions for data centers will be the right paths for Cisco to expand its products. It is among the best secure cloud platforms.
The company realizes that the need to access applications from anywhere and at any time is still an in-demand service in the world. He also focuses on its security, and with the rapidly developing artificial intelligence, he sees the most advantageous path in this industry. The decline in shares of Cisco Systems was 22.37%. *
According to Bee Kheng Taya , president of Cisco for the ASEAN region, companies must meet the changing demands of their customers and their solutions should remain relevant in a hybrid, digital and ever-evolving environment. In 2023, Cisco wants to prepare for the future of technology by securing it as thoroughly as possible, this applies not only to the digital world, but also to their own investments.
Cisco Systems stock movement over the past five years. (Source: Trading Economics ) *
Oracle Corporation (ORCL)
Oracle provides products and services for enterprise information technology platforms. Its customers include government agencies, educational institutions and retailers. The company has strategically located innovation centers around the world that facilitate collaboration between global and regional partners to develop technology solutions that impact businesses, industry and society. Compared to the other mentioned companies, Oracle Corporation saw a slightly smaller decline in its shares, only 4.91%. *
The company aims to grow organic revenue to $65 billion by 2026, achieve a 45% operating margin while exceeding more than 10% annual earnings per share growth. [5] In 2023, the company will build additional infrastructure solutions for customers. As it offers applications in the enterprise industry and focuses on many areas of the technology world, Oracle’s solutions will continue to be attractive. Compared to other tech companies, they managed to weather 2022 solidly, and their long-term plan suggests that they are ready for 2023 as well.
Oracle’s stock movement over the past five years. (Source: Trading Economics ) *
Broadcom Inc. _ (AVGO)
Broadcom is a technology company that designs, develops and delivers a range of semiconductor and infrastructure software solutions and Internet Protocol (IP) licenses. In May 2022, it announced the purchase of VMware Inc. _ (VMW) for $61 billion, expanding its already richly diversified portfolio this year. The total decline in shares for 2022 was calculated at 16.5%. *
It made more than $3 billion in net income last quarter, and its stock trades at thirteen times forward earnings. * Broadcom pays a dividend of 3.2%, which is unusual among technology companies and at the same time means a very high yield. The diversification mentioned in the purchase of VMware could increase margins next year. [6]
Broadcom stock movement Inc. for the past five years. (Source: Trading Economics ) *
Prepared by Olívia Lacenová , Chief Analyst of the Company Wonderinterest Trading Ltd.
* Past performance is no guarantee of future results.
[1,2,3,4,5,6] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.
Sources:
https://seekingalpha.com/article/4564720-when-to-back-up-the-truck-on-apple-stock-in-2023
https://www.forbes.com/advisor/investing/best-tech-stocks/
