5 Undervalued Tech Stocks For Your January 2022 Watchlist
It’s been a bit of a mixed start for tech stocks as we kick off the year. While FAANG stocks have generally held up well, many of the hyper-growth names continue to plummet amid the Fed’s tapering plans and expectations of rate hikes. And this has led many investors looking for the best value stocks to buy in the stock market today.
With the U.S. surpassing one million daily cases of COVID-19, it’s not easy to have an optimistic outlook. On the flip side, many also believe that the Omicron is the variant that can put this pandemic to bed. Although it is difficult to know how things will play out in the next few months, many investors remain excited about the future of some of the tech names in the market.
This week, we saw the Dow notch another record close, despite a sizable amount of volatility. And because of this, trading tech stocks has not been easy, to say the least. Considering that many of them have been under pressure in recent months, would you take advantage of the recent pull-back among tech stocks in the stock market right now?
Top Undervalued Stocks To Watch In 2022
- Alibaba Group Holdings Ltd (NYSE: BABA)
- Zoom Video Communications Inc. (NASDAQ: ZM)
- Zynga Inc. (NASDAQ: ZNGA)
- Block Inc. (NYSE: SQ)
- Pinterest Inc. (NYSE: PINS)
Alibaba Group Holdings
Alibaba is no doubt one of the largest names in the Chinese e-commerce industry today. Expanding beyond its initial e-commerce roots, the company is now a leading presence across entertainment, internet, and cloud computing tech in China. Sure, the company’s shares may have been on the decline this year due to regulatory pressures. However, given the company’s impressive operations, some may see this as an opportunity to buy on the dip.
One notable figure doubling down on BABA stock is Warren Buffett’s longtime business partner Charlie Munger. He is probably best known as the vice chairman of Berkshire Hathaway (NYSE: BRK.B) and has long been bullish on China. In fact, he had previously praised China’s crackdown on Jack Ma’s Ant Group. For those unfamiliar, the Ant $37 billion stock offering was derailed by regulators in November 2020. Despite the slowing growth rates, Alibaba is still growing its revenue 30% year-over-year. But perhaps the most bullish argument some would make about this Chinese tech giant is its low valuation. If you share the same sentiment, would you agree that an investment in BABA stock is attractive from a risk-reward perspective?
Zoom Video Communications
Zoom’s video conference platform has become a mainstay during the pandemic as remote working became a norm. The company’s video telephony and online chat services have exploded in popularity since the start of the pandemic.For its third fiscal quarter results, the company posted a total revenue of $1.05 billion. That represents an increase of 35% year-over-year. It saw 2,507 customers contributing more than $100,000 in trailing 12 months revenue, up by about 94% year-over-year. Zoom also said it will launch its own cloud contact center software in early 2022.
The company’s stock however has been on the downturn since the end of 2020, despite its revenue growth. After all, investors may have concerns about potential slowdowns in the company’s growth as the economy reopens. But with many companies delaying their plans to bring their employees back to office, many will continue to rely on services provided by Zoom. With that in mind, would you be adding ZM stock to your portfolio?
Similar to Zoom Video Communication, Zynga stock kept falling over the last year. Admittedly, privacy changes on iOS and Android and the possibility of additional disruptions have weakened the outlook of the gaming publisher. While that’s certainly a hurdle, it doesn’t mean that the company has no other growth opportunities to pursue. In fact, Zynga has one of the strongest collections of mobile development studios in the industry. And the overall mobile gaming market still looks poised for strong growth in the coming decade.
Financially, Zynga has also been firing on all cylinders in its recent third quarter. Its revenue was $705 million, up 40% year-over-year. This is the company’s highest ever third-quarter revenue and bookings as it remains on pace to have the best financial year in the company’s history. With a market capitalization of roughly $7.1 billion, this growth stock looks cheap to pass up. Considering all this, would you consider ZNGA stock an undervalued tech stock to buy?
Block, formerly known as Square, has been one of the top fintech stocks to buy in the stock market. The company has two reportable segments, Seller and Cash App. The seller ecosystem is designed for commerce. Essentially, it provides merchants with all of the hardware, software, and services needed to manage a business in both physical and digital channels. Meanwhile, its Cash App has been a hit among consumers as it allows its users to send and receive money at any time and anywhere.
The company has seen strong demand for its products, and that has translated into strong growth over the past few years. From its third-quarter earnings, Block’s sales came in 27% higher year-over-year to $3.84 billion. Broadly speaking, the company’s seller ecosystem simplifies many businesses, both online and brick-and-mortar shops. With its one stop solution for many businesses, the company should continue to thrive. Given its recent weakness, would you consider investing in SQ stock now?
Social media stocks Pinterest was getting pinned to the board on Tuesday. The company’s stock price slipped to a new 52-week low yesterday. This came after a downgrade from Guggenheim, which cited the decline of the social media’s user base. With many countries starting to push ahead with the reopening of their economies, investors are concerned that this would hamper the company’s growth. Considering the company’s prospects and rapidly improving profitability, many are hoping the decline in users could likely be short-term.
From its third fiscal quarter, Pinterest reported $632.9 million in revenue, up by 43% year-over-year. Notably, the company introduced the new Pinner products and experiences worldwide. This shows its commitment to continuously strive to provide enhanced experiences for its users. In addition to that, Pinterest is also rolling out its first monetization program for creators, called Creator Rewards. With all that in mind, would PINS stock make your list of tech stocks to buy this week?
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