7 Tech Stocks to Buy While They’re Down in 2022
The market has abused tech stocks in 2022 and the sector is one of the biggest losers so far this year. Some companies like Snap Inc. (NYSE: SNAP) and Netflix (Nasdaq: NFLX) have faced stock capitulation and panic selling. Even stalwart companies like Apple (Nasdaq: AAPL) have suffered in a sector that’s largely underperforming investor expectations. The sector as a whole lags the market by double digits. It begs the question: are there any tech stocks to buy right now?
Value investors and long-term investors who believe in the market’s potential will have no trouble finding opportunities to buy tech stocks right now. The question is: which depressed stocks have the best chance to rebound and outperform the market long-term? To narrow down your options for tech stocks to buy, here’s a look at seven of them that are strong contenders.
Top Tech Stocks to Buy in 2022
No. 7 Netflix
If you’re surprised to see Netflix on this list, you’re not alone. Most investors wouldn’t think twice about touching Netflix with a ten-foot pole right now, but it’s worth looking at the long-term prospects of this FAANG alumni. NFLX is still a $102 billion company and one of the biggest names in the streaming game. The company’s user base may be falling, but it continues to deliver an excellent ROE of 32%. With a current P/E of 21.97, Netflix is a long-term buy and hold contender with these fundamentals. It’s one that will outlast the current negative sentiment.
No. 6 Dropbox (Nasdaq: DBX)
Dropbox is still hovering around its 52-week lows. And it’s a prime buying opportunity for those looking for tech stocks to buy thanks to very attractive fundamentals. It’s still the premier name in online file sharing. Additionally, it’s seeking to grow its bottom line aggressively through several strategic partnerships. A 79.70% gross profit margin confirms the company’s business model amid an increasing demand for digital collaboration. The company has posted 31.40% EPS over the past five years. And it stands to reward customers that buy in now while it charts a course toward increased profitability in the coming years.
No. 5 Cisco Systems (Nasdaq: CSCO)
At its current valuation, Cisco Systems Inc. is sending all the right messages to investors who are paying attention. The company has incredible margins (26.60% operating margin), which means its $51.58 billion in annual sales translate to healthy free cash flow for the company. For those seeking a reliable dividend stock, CSCO will net you 3.84%. Best of all, the dividend appears relatively safe; the company’s payout ratio is 53%. Just above its 52-week lows, CSCO is a tech stock that should, at the very least, be at the top of your watch list for tech stocks to buy.
No. 4 Oracle (NYSE: ORCL)
Oracle is one of many software-side mega caps that’s making a case for value investors in the current market. The company has excellent margins (79.40% gross margin; 26% operating margin) and healthy income of $7.56 billion to show for it. Better still, it offers a longstanding dividend that’s just above 60% of its payout ratio, giving income investors something to consider. While its valuation metrics are a little high relative to the industry, the stock price is about $1 off its 52-week lows. It’s a good time to start looking at Oracle as a long-term tech investment.
No. 3 Apple
Shocked to see Apple on this list? You shouldn’t be. The company is about 20% off its 52-week highs, which makes for a great buying opportunity. Apple is outperforming just about every other company in the consumer electronics sector, with margins, cash flow, ROE, ROA and cash on-hand to show for it. The most alluring case for Apple as a tech stock to buy now is the company’s ecosystem, which is sticky and synergistic, generating new and recurring usership annually. If you need any other reason to buy Apple, just take a look at Warren Buffett’s holdings.
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Consider These Tech Stocks to Buy While They’re on Sale
It’s easy to look at the tech sector and see nothing but red. But beneath the red are plenty of opportunities to purchase strong, reputable companies at levels that are lower than they’ve been in a year or even longer. For those with a long-term mindset and positive outlook on the digital future, the seven stocks above offer a tremendous buying opportunity. Do you have the confidence to open or add to a position?
It can be tough navigating an uncertain market, especially when much of the market’s downturn is driven by tech stocks. If you’re interested in learning more about the opportunities hiding in this market, discover our investment newsletters and get expert insights delivered straight to your inbox daily!
