Investing in tech stocks doesn't need to be rocket science. Often, the product may be complicated, but the application is straightforward. Anyone can invest in tech stocks with basic investment knowledge.

Unity Software (U 3.54%), Crowdstrike (CRWD 1.68%), and Snowflake (SNOW 0.19%) each solve headache-level problems. Additionally, they have great expansion opportunities, making them smart buys for 2022 and beyond.

A human's finger reaches to point out data being analyzed on a computer.

Image source: Getty Images

Unity Software

Developing a video game is difficult. Without an engine to build the base game on, it would take years to create a workable program. Unity Software brings these ideas to fruition through its 3D animation solution. Additionally, once the game is launched Unity offers tools to monetize it, acquire a new audience, and analyze player behavior, creating an information loop for game improvements. This is not just useful for video games; Unity's animation programs can also bring industrial designs to life and build augmented and virtual reality models for an immersive experience.

Unity's third-quarter results were impressive. Its total revenue was up 43% to $286.3 million. Operate solutions -- the segment that manages programs -- increased the fastest at 54%. It also made up 65% of total revenue. It's a a positive sign when the largest segment is also growing the quickest. A key business metric management identified is customers spending greater than $100,000 annually. That count increased to 973 from 739, up 32% over the last year.

Valuation has been a roller-coaster ride for Unity since going public in 2020.

U PS Ratio Chart

U PS Ratio data by YCharts

While its price-to-sales (P/S) ratio is down from its high, it is also far from its low. Forty times sales isn't cheap, but Unity has been delivering great results throughout the year. Moving into 2022, investors should watch its large customer spending count as well as future partnerships. During Q3, it announced a joint venture with UFC utilizing Unity's Metacast software to create an immersive fan experience. Unity's offerings have nearly unlimited use cases, so investors would be wise to purchase some stock because of its wide potential.  

Crowdstrike

One vulnerable component in any network system is the access points. Malicious programs can be downloaded from the internet on a single laptop and wreak havoc on an entire business network, potentially holding it or its information for ransom. Crowdstrike secures these endpoints with its leading Falcon platform. Its cloud-native security protects devices no matter where employees are accessing a company's network. Once a customer signs on, Crowdstrike has multiple other solutions to expand defense capabilities. In fact, 68% of subscribers utilize four or more modules.

2021 has been a successful year; Crowdstrike's annual recurring revenue (ARR) increased to $1.51 billion, up 67% from Oct. 31, 2020. Q3 total revenue was $380 million, up 63% for the period ending Oct. 31, with subscription revenue making up $357 million. While Crowdstrike remains unprofitable, it converted more than 30% of revenue into free cash flow. Customer count increased 75% to 14,687 during Q3 as well.

At its midpoint, Crowdstrike is guiding for $1.43 billion in sales for FY22 -- ending Jan. 31, 2022 -- representing 64% growth. Cybersecurity is a growing concern, and businesses must prevent attacks by strengthening their defenses. Crowdstrike assists with this pursuit and appears to be a smart buy, trading almost 30% below its all-time high.

Snowflake

In a connected world, data is constantly generated and holds valuable insights. However, businesses rarely have enough storage capacity and cannot process it to find meaningful information. Snowflake handles both aspects with its data warehouse and engineering applications. Data can power machine-learning models, creating more powerful solutions for Snowflake's customers. The possibilities are endless with data, and Snowflake helps customers maximize their data interpretation potential.

Snowflake has been growing in key areas.

Metric Revenue Total Customers $1-Million Customers Fortune 500 Customers
Q3 Value $312.5 million 5,416 148 223
YOY Growth 110% 52% 128% 30%

Source: Snowflake. YOY = year-over-year. Q3 ended Oct. 31, 2021.

It also had an impressive 173% net revenue retention rate, meaning all customers -- including those who no longer spend any money with Snowflake -- spent 73 cents in addition to every dollar they spent before. Businesses are clearly finding the platform beneficial if they are expanding their spending. Revenue is almost entirely consumption-based, meaning Snowflake recognizes more revenue as customers increase their use.

Management guided for 95% fourth-quarter revenue growth, which translates to 103% FY 22 growth. Ridiculous growth often pairs with a high valuation, and Snowflake is no exception, trading at a P/S of more than 100. If growth slows through FY23, Snowflake shareholders will experience heavy losses. However, with emerging-use cases and rapidly expanding customer spending, I think that Snowflake can keep up the pace.

Each stock here has some risk, as all trade at high multiples and are unprofitable. However, they are growing quickly and have a large market opportunity, generating investor excitement. Should any stock report less-than-stellar quarterly results, expect the stock to get hit hard. Each position should be sized accordingly so a significant loss won't result in lost sleep. Unity Software, Crowdstrike, and Snowflake are smart buys for 2022. Consider picking some up and holding on to these companies for the coming years.