For investors in a wide swath of companies, 2022 was a rough year. That said, it was a downright brutal year for those invested in most tech companies.
Indeed, the three stocks on this list are among the mega-cap juggernauts of the tech world. With market capitalizations ranging from $335 billion to more than $2 trillion, these are the companies most investors had on their watch lists (or in their portfolios) in 2022.
However, with the significant rotation out of growth stocks last year, questions remain. Are these stocks worth buying at these levels? Or is 2023 going to be another year where investors are betting off waiting?
In either case, it pays to keep a close eye on how these stocks perform. That’s because whether you’re an active investor with direct exposure to these names, or a passive investor focused on index funds, you’ve probably got exposure to these names. They’re among the heaviest weightings in many index funds, after all.
With that said, let’s dive into why these market-moving tech companies are worth watching in 2023.
Alphabet (GOOG, GOOGL)
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Alphabet’s Google search business remains the core pillar of the company’s cash flow-generating machine. However, the company has shown an incredible ability to lessen what could be sub-par growth in the advertising business via the company’s fast-growing Google Could business. Overall, this is a multi-headed tech behemoth with several impressive cash flow centers worth watching.
Analysts have noted that Alphabet has produced annual revenue growth of 23% over the past five years and operational profitability of 27%. These are key metrics to watch in the year to come to see how Alphabet is able to weather the storm. Assuming estimates aren’t missed to a significant degree, this is a stock I think could be poised for a nice medium-term rebound. It’s on my watch list now.
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What list of tech companies to buy is complete without talking about Apple (NASDAQ:AAPL)?
This company skipped my watch list and has been a portfolio holding for some time. That’s a good thing, considering Apple’s incredible growth in recent years, spurred by continued revenue diversification across product lines and a very loyal consumer base.
The company’s ongoing troubles with its iPhone plant in China, lower expectations for demand for consumer discretionary goods, and Apple’s relatively high-priced products have made for a negative catalyst soup. Accordingly, in recent days, this stock has hit multi-year lows.
That said, I think apple is certainly worth putting on the watch list right now. Depending on how 2023 shapes up, Apple could be a stock that leads the market out of the gutter it’s in. This is the world’s largest company for a reason and is likely to continue pushing forward, no matter the economic environment.
Meta Platforms (META)
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Last on this list of tech companies worth watching in 2023 is Meta Platforms (NASDAQ:META). A beleaguered stock, to be sure, Meta has had a rough go of things, to say the least.
Now down more than 60% over the past year alone, Meta stock has been hit by a flurry of issues. Whether it’s the company’s all-in (and very expensive) move into the metaverse, its heavy cost profile, or its loss of focus on its core cash flow-producing business, there are reasons why many investors are steering clear of this top tech name.
That said, at these lower levels, I think META stock is a buy. This is a stock that has a lot of bad news priced in. Unless we’re up for the next Great Depression, this is a company that should be at least close to consolidating near the bottom.
Sure, things could get materially worse in 2023. Many expect this coming year to provide more of the same. But for those with a decade-plus investing time horizon, this is a stock I think is worth owning at these levels right now. Or, at least deserves a place on the watch list.
On the date of publication, Chris MacDonald has a position in AAPL, META. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.