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3 Top Tech Stocks to Buy for 2022

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These technology companies are set to serve up big wins next year.

It's been a wild year for technology stocks. Volatility has been the name of the game, but the tech sector remains one of the best starting points for investors seeking explosive long-term gains. 

To help provide some investing ideas that can position you to thrive next year, a panel of Motley Fool contributors has profiled three top tech companies that look primed to deliver big wins. Read on to see why they think that these stocks are ready to make you richer in 2022 and beyond. 

The numbers 2022 and a person holding a lightbulb and using a laptop.

Image source: Getty Images.

The worldwide e-commerce giant is growing its more profitable segments

Parkev Tatevosian: Amazon (AMZN -0.69%) is heading into 2022 with a lot of momentum behind it. The global giant has increased sales by 32% in the trailing 12 months ended Sept. 30. Since the pandemic's onset, hundreds of millions of folks have turned to Amazon to fulfill their daily needs.

Fortunately for shareholders, Amazon's increasing scale is leading to greater profits. Indeed, Amazon's operating profit margin expanded from 1.8% in 2011 to 5.9% in 2020. That may not look like an impressive figure, but 5.9% on $386 billion in sales is a considerable number -- $23 billion in operating profits, to be precise. Sales and profits are likely to keep growing for Amazon in 2022. The company is gaining millions of new customers during the pandemic, and many of them might stick around long after it's over. 

Moreover, Amazon's most profitable segment, Amazon Web Services (AWS), is growing revenue faster than the company overall. The continued success of AWS could push Amazon's operating profits higher in 2022.

Another profitable segment that will encourage profit growth in 2022 is advertising. The company doesn't break out the metric individually, but the segment that contains advertising revenue is accelerating rapidly. It has grown revenue over 40% year over year in each of the last six quarters, reaching over 60% on three occasions.

Amazon is a massive company that is sustaining double-digit revenue growth. The more profitable segments within the company are growing faster than the company overall, increasing operating profits. And Amazon can be had at a relatively fair price-to-earnings ratio of 68.9. For those reasons, Amazon is a top tech stock to buy for 2022.

This interactive content leader is too cheap to pass up

Keith Noonan: 2021 been a challenging year for investors who bet big on video game stocks, and Zynga (ZNGA) has been among the industry's biggest losers. The company's share price is now down roughly 35% across this year's trading.

After enjoying some stellar growth tailwinds amid 2020's shelter-in-place and social distancing conditions, the market wasn't impressed by the sales and earnings that Zynga and other top industry players posted this year. Not only was Zynga up against a challenging basis of comparison, it also saw engagement for some of its key games slip as people began getting back out into the world. Unfortunately, these weren't the only factors that weighed on the company's valuation.

Apple and Alphabet have implemented more restrictive standards for the gathering of user data on their respective mobile platforms, and that means that targeted advertising in video games is going to be less effective. Zynga has been making acquisition moves in order to build in-game ads as a revenue stream, and the outlook on that front has taken a hit. Crackdowns on the technology and entertainment industries in China have also narrowed opportunities in a key geographic segment that many publishers were counting on as an important market. 

That's admittedly a lot of headwinds to deal with inside of a year, but Zynga stands as one of my top stock picks for 2022. The company has a great a balance sheet and a strong collection of development and marketing resources to work with, and it should be able to continue delivering new hit games and content updates that drive sales and earnings higher. Tech shifts including augmented reality and the metaverse are just starting to take root, and Zynga has shown that it knows how to keep players engaged and spending -- even if the market isn't exactly enamored with its recent results.

For investors looking to capitalize on the long-term growth of the global gaming industry, Zynga stock is too cheap to ignore. 

From a video conferencing app to a unified communications platform 

Jason Hall: There's no denying it: Zoom Video Communications (ZM -1.21%) might be the business that got the biggest boost from the coronavirus pandemic. Its quarterly revenues were growing quickly prior to the pandemic, but have increased more than fivefold since the beginning of 2020: 

ZM Revenue (Quarterly) Chart

ZM Revenue (Quarterly) data by YCharts

At one point, Zoom shares gained almost 1,000% in 2020, and are still up more than 215%. But they're also down over 65% from the high, as investors seem convinced that the Zoom growth story is over. The fact is, that's just not true, and it's presented investors with a wonderful opportunity to buy now. 

Zoom is still growing quickly. Revenue was up 35% year over year in the third quarter, and also up sequentially. There's some churn from smaller customers, but many of its largest customers are looking to Zoom for more of their communications needs. Zoom Phone sales more than doubled, while the number of customers spending $100,000+ increased 94%. 

What's really happening is Zoom is transforming from a videoconferencing app to a unified communications platform. Videoconferencing is now part of how companies work, both internally and with customers, and Zoom is leveraging this to become more integrated with its biggest customers. 

And today, we can buy that business, which could grow at 20% or more per year for another decade, for 15 times sales and 40 times forward earnings estimates. Combine the growth prospects with its profitability -- 73% gross margins and 45% cash margins over the past year -- and that's a screaming buy.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jason Hall owns Alphabet (C shares) and Zoom Video Communications. Keith Noonan owns Zynga. Parkev Tatevosian owns Alphabet (C shares), Amazon, and Apple. The Motley Fool owns and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Zoom Video Communications, and Zynga. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.

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