As in the year before, 2021 once again saw the novel coronavirus dominate headlines. While the latest variant in this awful mix, omicron, causing more restrictions, the end of the pandemic is hard to see. Let’s hope things improve, but then again, the outbreak has been cynically positive for certain stocks to buy.
However, what will 2022 hold? Despite worries across the board — and not just dealing with the pandemic — active investors have enjoyed a plethora of opportunities. For instance, 2021 will also go down as the year of the cryptocurrency complex, with several major digital assets hitting blistering record prices. Just as importantly, the concept of decentralization has bolstered the case for multiple stocks to buy.
Of course, with greater emphasis on digitalization comes a greater need for cybersecurity. While many companies have recalled their workers, and life appears to be getting back to somewhat normal, several other firms have decided to extend their work-from-home experiments. However, this approach also expands the total addressable market for cybercriminals, who can exploit unsecured virtual private networks. But again, this also offers cynical upside for related stocks to buy.
Moreover, who can forget one of the biggest — and to be frank ugliest — trend of last year that carried into this year? Obviously, I speak about politics. Political dialogue is always a hot topic and can get a little ugly sometimes. This is awful for our nation, yes, but it is also good for social-media-related stocks to buy.
Still, no matter how many pages on the calendar we turn, some things stay the same. For example, humanity has an insatiable appetite to explore. And with the technology that we have, the final frontier might not be so final anymore. So, with all of that in mind, here are some ideas for stocks to buy for 2022’s hottest trends.
- Microsoft (NASDAQ:MSFT)
- IBM (NYSE:IBM)
- Planet Labs (NYSE:PL)
- Twitter (NYSE:TWTR)
- Smith & Wesson Brands (NASDAQ:SWBI)
- Fortinet (NASDAQ:FTNT)
- Crypto 1 Acquisition Corp (NASDAQ:DAOOU)
Per usual, you’ll want to conduct extensive due diligence before diving into these stocks to buy. One major risk factor for 2022 is the Federal Reserve. Many expect the Fed to raise interest rates significantly next year to combat rising inflation. If so, that could reduce appetite for risk-on growth names so be on your toes.
Stocks to Buy: Microsoft (MSFT)
Thanks to metaverse madness, the old faithful Microsoft could once again enjoy a solid year in 2022. Sure, there are much sexier names to ride the metaverse trend, which represents the next generation of connectivity. However, I like to take my connectivity-related innovations in bite-sized pieces. Here’s why.
With the internet, home computers could finally connect to each other, enabling a massive paradigm shift that will define societies I suppose for all eternity. Many folks refer to this age as Web 1.0. But the issue was that the internet was a scattered, disorganized primordial soup of data. That’s where big tech companies came along and provided much-needed order in the burgeoning space.
But Web 2.0 came with the consequence of power consolidation among a few. However, through blockchain technology and decentralized ecosystems, it’s now possible to connect robustly beyond arbitrarily defined borders. Similarly, the metaverse allows users to connect more of their personalities with the internet through AR/VR solutions.
What Microsoft is attempting to do with the metaverse is to create a virtual work ecosystem, perfect for the new normal. But if it doesn’t work (because the idea sounds nuts), MSFT is still one of the stocks to buy based on the underlying business applications.
With IBM, I’m going to go with another old faithful. This time, however, the performance has been less than encouraging, if I’m being totally honest. For instance, since the session ended Dec. 8, 2021, the trailing five-year performance for Microsoft shares is nearly 450%. And with the relevance mentioned above, it can still pump out positive returns in my humble opinion.
On the flip side, IBM shares are down nearly 26% during the same frame. Admittedly, it’s not a great look. Even on a year-to-date (YTD) basis, the equity unit is down almost 2%. With Fed Chair Jerome Powell running the printing press at full speed, that’s not a good return. (And the last bit was a joke — I know that’s not how the Fed works).
However, it’s hard to imagine that IBM will continue underperforming, which might make it a candidate for contrarian stocks to buy. More importantly, I see underappreciated strength in its artificial intelligence business.
Not only is the company using its artificial intelligence (AI) platform to analyze the spread of Covid-19, IBM has the potential to accelerate its virtual assistants program because of the pandemic. With companies struggling to hire workers, AI could become a huge part of IBM’s possible recovery.
Stocks to Buy: Planet Labs (PL)
A recent entry into the public arena via a business combination with a special purpose acquisition company (SPAC), Planet Labs is one of the more intriguing stocks to buy within the broader space economy. Yes, you have more direct plays, such as firms specializing in stratospheric rocket rides. But that’s really only for the ultra-wealthy.
With Planet Labs, you have a much more practical business. A satellite-imaging service provider, I mentioned in my coverage for Benzinga that “PL stock is about looking down to raise people up.” Specifically, the company provides satellite images for over 700 customers covering a range of industries, including agriculture, energy and defense.
Recently, the New York Times used the service to track how North Korea illicitly and creatively acquires its oil. Personally, I believe the agricultural efficiency angle is a game-changing catalyst. “According to the Global Center on Adaptation, satellite-imaging services enable farmers to map, measure and monitor their land, providing a clearer picture for mitigation efforts and effective resource distribution.”
With the space economy continuing to expand its range and utility, PL is one of the more intriguing stocks to buy.
As I’ve written about in prior InvestorPlace articles, I like the idea of adding Digital World Acquisition Corp (NASDAQ:DWAC) to a list of speculative stocks to buy. The so-called Trump SPAC, DWAC could basically bring the former president’s Truth Social platform into the public arena, thus competing directly with Twitter. And that might be bad news for TWTR considering how much love Donald Trump receives from his loyal followers.
However, with another contentious election coming up, there’s also an argument to be made that any popular social media network will benefit. You see, when you have such a situation, it’s best not to take sides as an investor but rather, sell tickets to the burning dumpster fire.
The American electorate loves dumpster fires. And some of the hottest infernos are found on Twitter — what’s not to love, especially if you have this company on your list of stocks to buy?
To be fair, many risks exist. If Truth Social takes off, it could siphon users from Twitter and other platforms. However, the backdrop of the 20220 midterm elections makes TWTR very interesting for some speculators.
Stocks to Buy: Smith & Wesson Brands (SWBI)
Easily, Smith & Wesson Brands is one of the riskiest and most controversial ideas for stocks to buy in 2022. Right off the bat, the equity unit tanked nearly 21% on disappointing results for its fiscal second-quarter earnings report. Nevertheless, the political firestorm could make guns a big deal in 2022.
As you know, there were two extremely high-profile was-it-murder-or-self-defense cases this year. Now, let me be clear. According to information from the Center for American Progress, the presence of firearms in households results in a higher risk for deadly outcomes for women and youth. My personal take is that the presence of guns in both cases exacerbated already simmering social tensions.
However, my understanding is that in both cases, the framework was not about exacerbation or lack of common sense. Rather, it was about whether, in the moment of the shooting incidents, the defendants were justified in using lethal force.
Therefore, the outcome of guilty in one case and not guilty in another confuses the self-defense issue. Both defendants arguably aggravated their situation with the presence of firearms, resulting in shooting incidents but with divergent legal consequences.
Personally, I think we may see increased gun sales due to fears of more government restrictions in light of these inflammatory cases. Certainly, it’s a sector to watch.
Even before the pandemic, Americans spent a considerable amount of time on the internet. Of course, with the Covid-19 crisis, people are basically incentivized to go online, whether for their work or for their safety. As a result, associated sectors such as e-commerce retail sales skyrocketed during the worst of the pandemic.
Not surprisingly, then, the Pew Research Center reported that 85% of Americans go online daily. And approximately three-in-ten adults are “almost constantly” online, which is part of the new normal. Who knows if this trend will ever go down, which is why investors should look into cybersecurity firm Fortinet.
In particular, I like the company for its VPN services, which is a “secure network that enables internet users to hide their Internet Protocol (IP) address to securely browse the web and access content from other countries.”
Some folks get the misunderstanding that VPNs are only for masking questionable or illicit activities. I suppose that is a popular application. However, pretty much everyone should consider VPN services because of their enhanced security. Again, with more people online, the circumstance invites cyberhackers to exploit people with inferior cyber protection.
Stocks to Buy: Crypto 1 Acquisition Corp (DAOOU)
As an investment, I can’t think of a more talked-about sector than cryptocurrencies. Thanks to their decentralized nature, digital assets trade 24/7/365. Sure, this always-on type of trading contributes to the market’s notorious volatility. At the same time, everybody’s on equal terms. So long as you have internet access, you can participate in this groundbreaking journey.
However, most folks find the idea of betting directly on individual cryptos too risky. I get it. Some of the most popular coins aren’t even trading hands for a penny, which raises questions about future viability. As well, because of their decentralized nature, you really have to be responsible for your holdings. Unlike stock market transactions, you have fewer inherent protections because you’re basically operating outside the system.
Therefore, those who want exposure to the crypto/blockchain industry but without dealing with some of the troubles should consider public companies that are tied to the sector. Since I don’t want to pick and choose winners and losers in this also volatile segment within a segment, I’m just going to go with Crypto 1 Acquisition Corp.
Crypto 1 is a SPAC seeking a business combination within the broader decentralized finance market, including crypto exchanges, wallets and lending services. I think it has potential for a successful merger but cryptos could also disappoint in 2022. Thus, I’m putting this last on this list of stocks to buy.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.