Investors are often faced with the question of where to invest cash in the stock market, and may feel that there are more options. Because of recent stock dividends, many investors may find it easier to buy some stocks they once thought were overpriced.
Moreover, between Nasdaq Composite In a bear market and a sharp decline in many tech stocks, investors can buy more with that $5,000. Fortunately, the chances seem to be high Amazon (AMZN 0.73%), PayPal Holdings (PYPL 1.24%)And Alphabet (GOOGL 0.96%) (GOOG 0.99%). Let’s take a closer look at these three tech stocks that you may want to consider buying and holding for the long term.
1. Amazon
Investors should consider Amazon, but not because one-third of a $5,000 investment buys 12 shares at current prices. While e-commerce drives most of its revenue, the low profit margin of this part of Amazon’s business has not pleased investors. Additionally, the bid to buy has been announced. Apply health. It may attract more interest than income.
Instead, the technology-focused segments can serve as drivers. The company’s main source of profit is its cloud division, led by Amazon Web Services (AWS). Although AWS has only provided 16 percent of the company’s revenue so far, it accounted for all of 2022’s profits. Moreover, the advertising business continues to grow even as the US economy slows. Ad spending on Amazon has increased more than 20% year-over-year in each of the last two quarters.
For Amazon, net sales in the first six months of 2022 rose 7 percent year over year to $238 billion. However, e-commerce sales grew by only 3 percent. AWS sales, however, rose 35 percent to $38 billion. This resulted in a total loss of $6 billion during that period due to rapidly increasing operating costs.
Despite the company’s struggles, analysts expect revenue to grow 11 percent this year and 16 percent in 2023. It was touched in June. This suggests that Amazon may continue to prosper even if its retail growth takes time to recover.
2. PayPal Holdings
PayPal is a pioneer of the fintech industry, and its early stage status has made it the go-to transaction platform in 202 countries. As a result, digital transactions continue to generate the majority of revenue. PayPal and Venmo generated around $660 billion in total payment volume in the first two quarters of 2022.
PayPal holds huge potential that analysts can’t measure. One is PayPal Ventures, which invests in fintech startups. PayPal’s situation has attracted investment from activist Elliott Management, a move that could lead to a turnaround that could send its stock higher.
PayPal stock could use the boost. The stock is down about 67% from its 52-week high. A slowdown in account growth and a post-pandemic decline in online activity weighed on the stock.
In the year Revenue for the first two quarters of 2022 is projected at $13 billion, up 8% from last year. Still, trading costs and investment losses weighed on the bottom line: Its $168 million in the first half of 2022 was far less than the $2.3 billion it earned in the same period in 2021.
Still, the company expects 10% revenue growth for 2022. Additionally, the price-to-sales ratio is now 4 — a record low for PayPal. A third of a $5,000 investment buys 18 shares, and as more transactions continue to happen online, PayPal can regain its mojo.
3. Alphabet
With a $5,000 investment, one third can buy about 15 shares of Google’s parent Alphabet. And investors should consider that move because the company has evolved well beyond its origins as a search engine provider. Its search dominance and ownership of YouTube has made it an advertising powerhouse, bringing in the money it has invested in many other businesses. Also, its $125 billion in liquidity gives it one of the strongest balance sheets among public companies.
It has attracted much attention for its artificial intelligence and machine learning applications. He also implemented these innovations on Google Cloud. Over the past two quarters, Google Cloud reported $12.1 billion in revenue, up 39 percent year-over-year.
In the year In the first half of 2022, the entire company generated $138 billion in revenue — up 17 percent from the same period in 2021. Advertising accounts for 81% of the revenue.
Still, Alphabet isn’t out of the fight, and its net income fell 13 percent to $32 billion over the same period. The rapid increase in costs and expenses and investment losses led to a decrease in profits.
However, it has only marginally benefited from the broader market sell-off, with its share price down less than 20 percent over the past 12 months. Plus, it’s trading at a price-to-earnings ratio of 21 — a valuation with multi-year lows. As its cloud division continues to grow and Alphabet deploys more of its resources, the company could soon grow bigger.
John McKee, CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the Motley Fool’s board of directors. Susan Frey, an executive at Alphabet, is a member of the Motley Fool’s board of directors. Will Healy has positions in PayPal Holdings. The Motley Fool has positions and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and PayPal Holdings. The Motley Fool has a disclosure policy.
