The final months of 2021 were marked by the trend of rising inflation rates leading to steep prices. While supply chain constraints posed difficulties for companies across many different sectors, government officials sought ways to effectively tame the inflationary trends that were sending prices up and consumer panic with it. We know from the Federal Reserve taper meeting that the central bank will implement strategic regulatory measures throughout the year to help curb inflation. However, the White House is still hard at work finding ways to help deal with these problems sooner. In response to the criticism it has received over rising prices, President Joe Biden’s administration has responded by citing concerns of excessive corporate power and monopolies. This has lead to the circulation of antitrust bills. Naturally, many are wondering what the best stocks to buy will be if the legislature at play passes.
This week began with the Biden administration announcing that it would be offering $1 billion in aid to small companies that produce meat and poultry products in an attempt to reduce prices by spurring competition. This type of policy is a page directly out of the classic economics handbooks. The argument is that effectively forcing firms to compete for customers will help drive commodity prices down.
In recent years, we have certainly seen reduced competition among small firms. Companies such as Google parent Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) have built staggering market monopolies, acquiring any company that tries to compete with them. Now, as momentum behind antitrust legislature grows in both the White House and Congress, both companies are taking drastic steps to ensure that the bills are met with resistance. This includes working to mobilize small business owners and trade groups against them on the grounds that breaking up these giants of industry would mean the end of valued services.
While this type of legislative development can send panic across Wall Street, investors should remain calm. Let’s take a look at the stocks that stand to benefit from the antitrust bills currently circulating.
- Alibaba Group (NYSE:BABA)
- Apple (NASDAQ:AAPL)
- eBay (NASDAQ:EBAY)
- Netflix (NASDAQ:NFLX)
- The Trade Desk (NASDAQ:TTD)
- TripAdvisor (NASDAQ:TRIP)
- Yelp (NYSE:YELP)
Stocks to Buy: Alibaba Group (BABA)
It’s no secret that no company can quite equal Amazon, in neither size nor power. That said, the closest thing is generally considered to be Alibaba, the China-based e-commerce giant with a business model similar to Amazon’s. Last year saw the company post an astounding $540.3 billion Chinese yuan in Single’s Day sales. That amounts to roughly $84.54 billion in U.S. dollars.
Now, it’s true that BABA stock suffered throughout 2021 as crackdowns from the Chinese government threatened international growth opportunities. However, as InvestorPlace contributor Nicolas Chahine recently noted, its problems are due to government pressure, not the type of financial constraints that should serve to worry investors. It is for this reason that Chahine rates BABA among stocks to buy for a “miracle comeback” in 2022.
If the antitrust legislature passes, investors will have further reason to regard Alibaba as a growth stock in 2022. China’s government may be cracking down on its companies that trade on U.S. exchanges, but consumption among its shoppers is only growing. If Amazon is compromised, it will lead China’s vast consumer market to find opportunities to buy the products they need closer to home. And as their country’s best-established digital retailer, Alibaba will be the name to which they turn. Additionally, Alibaba’s 2021 declines should make it a tempting opportunity for investors seeking to benefit from the antitrust measures.
Apple stock investors have had plenty to be happy about since the year began. The Big Tech innovator began the year by hitting an important milestone of achieving a market value of $3 trillion. And while it did slip this morning, experts are predicting a bright future for the stock. One industry expert responded to the news by predicting that Apple would continue to grow at a rate that outpaces the overall U.S. economy.
Indeed, a company with a consumer base as dedicated as Apple’s can benefit from the constant digital buzz generated by the anticipation of its next product. While rumors continue to circulate regarding the iPhone 14, the company is also working to expand into the metaverse with the production of its VR headset. InvestorPlace’s Luke Lango predicts the headset will help usher in the next stage of the internet.
On the subject of phones, though, it is important to note that while no company has been able to compete with the popularity of the iconic iPhone, Google has come close with its acquisition of Android. So far, Android is really the only smartphone system to rival Apple. If Alphabet were to be broken up, it would limit the power of Apple’s only real competitor in the mobile phone market. This would enable the company to grow even more and further the competitive edge it already has over Android.
Stocks to Buy: eBay (EBAY)
Before there was Amazon, there was eBay. Indeed, eBay was the digital marketplace consumers turned to for their shopping needs before Amazon came to dominate the market. While Amazon’s marketplace outnumbers eBay’s in virtually every way, it still provides a convenient venue for shoppers to purchase goods.
However, eBay does have one edge over Amazon as it deals in used goods, creating a marketplace for shoppers seeking things such as vintage clothing and vinyl records. Even with that type of difference, eBay would still be among the top beneficiaries of a policy that limits the power of Amazon. It would likely send consumers to eBay in the same way it would send those based in China to Alibaba.
While it’s not off to a good start so far this year, investors have plenty of reason to regard EBAY stock through a lens of optimism as 2022 gets underway. We’re still deep in the throws of the Great Resignation, but as InvestorPlace contributor Tezcan Gecgil noted, people quitting their jobs are likely to be more inclined to begin selling items on eBay, a venue which allows aspiring merchants to set up their own shops on the site. Additionally, it was recently named to a list of luxury resale stocks to buy as the market for used good expands. All of this seems like reason enough for eBay to be on everyone’s 2022 radar.
The streaming boom has absolutely taken off. But as is often the case, the company that was first to the race maintains an untouchable lead. Netflix cornered the streaming market early. Furthermore, it has only benefitted from the pandemic as viewers across the globe have been stuck at home. Even as things improved in the U.S., Netflix enjoyed a significant rally during the year’s final quarter. This was largely due to the impressive success of international series Squid Game.
The antitrust legislature could be beneficial to Netflix, as it would pose problems for two of its primary competitors. Amazon’s holdings include popular streaming service Amazon Prime Video and Alphabet’s include YouTube, both of which have sought to rival Netflix in both streaming and production of original content. While both industry giants face the prospect of being broken up, Netflix faces what looks like a promising year ahead.
It has been named among growth stocks to buy due to analyst praise and tech stocks predicted to produce impressive returns in 2022 despite late year declines. Now, investors have another reason to feel good about NFLX stock.
Stocks to Buy: The Trade Desk (TTD)
Of all the stocks to buy on this list, TTD likely comes across as the most surprising. The Trade Desk, though well known, doesn’t operate within any of the better known spaces dominated by Amazon and Alphabet. However, the company has emerged as a dominant player in the growing field of digital advertising. Additionally, it has carved out a niche as one of Google’s chief competitors in the field. While that market is rapidly expanding, it isn’t as oversaturated as some parts of the digital media world. As the Great Resignation has taken root, more and more consumers have made moves to start their own businesses. And for many, that means exploring the field of digital advertising. If Google’s digital advertising arm was limited, many consumers would likely turn to The Trade Desk first.
Additionally, it should be noted that the Trade Desk has a significant edge over its larger competitors. In a list of stocks to buy due to current trends with long-term growth potential, InvestorPlace contributor Bret Kenwell noted that,
“While advertising juggernauts like Alphabet and Meta (NASDAQ:FB) are barred from operating in China, The Trade Desk is not. Not only does this present a massive opportunity given the country’s size, but it gives The Trade Desk a massive advantage versus the larger industry titans.”
Therefore, it’s easy to see how The Trade Desk would benefit if Alphabet were to be broken up.
Whenever antitrust bills come up, Alphabet is always one of the companies prompting them. Therefore, the final two stocks to buy on this list are clear beneficiaries. TripAdvisor is known and trusted as a go-to source for tourists seeking information on new destinations. Although we may not always think of it in the same category as Google, it competes with the search engine on search verticals for traveling, along with destination and establishment reviews.
While many travel-related companies have experienced hardships during the pandemic, TRIP has enjoyed an excellent month. That’s especially impressive as the omicron variant has been surging across the globe. Moreover, it’s the only stock on this list to be trading in the green today. Shares are also up for the week and the month.
If Google were broken up, TripAdvisor would see a significant influx of site views and engagement. Indeed, consumers would still need somewhere to turn for trip information. While the future of travel remains uncertain, Americans have proven that even a pandemic can’t keep them at home. Plus, even local trips often require travel info, especially if consumers visit lesser known areas with fewer Covid cases.
Stocks to Buy: Yelp (YELP)
The final name on this list operates in much the same space as the company before it. As such, it stands to benefit from the circulating antitrust legislature in the same way. Yelp provides reviews of businesses and services. While this service can certainly be helpful to travelers, it does not have the specific travel focus of TripAdvisor. However, like its colleague, Yelp would certainly stand to benefit if Google were broken up. Certainly, many more customers seeking restaurant and retail establishment reviews would seek it out.
The last time Alphabet faced the threat of antitrust legislation, Yelp outlined exactly why the industry needed it. In a blog post, the smaller company accused Google of posing threats to its customers by “systematically reducing the quality of its search results in order to entrench and extend its search and search advertising monopolies.”
As long as there were no dramatic changes to Google’s search algorithm, both Yelp and TripAdvisor would be helped by the proposed antitrust bills. As of now, there is no immediate reason to expect Google to implement such a measure.
On the date of publication, Samuel O’Brient 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.