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The 3 Smartest Tech Stocks to Buy in 2022 and Beyond

By Leo Sun – Jan 5, 2022 at 7:57PM

Key Points

  • Meta will continue to benefit from the growth of the digital advertising, VR, and AR markets.
  • Veeva's cloud-based CRM platform will expand as more life science companies move their businesses online.
  • CrowdStrike's cloud-native cybersecurity platform will continue to disrupt legacy players that install on-site appliances.

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Meta, Veeva, and CrowdStrike will easily weather the near-term macro headwinds.

Tech stocks generally fall into two categories: Older companies that generate steady growth from mature technologies, and younger ones that focus on forward-thinking technologies and secular growth trends.

Over the past few months, rising inflation and higher interest rates caused many investors to rotate away from the younger companies and invest in the older blue-chip tech stocks as defensive plays.

That's a sound strategy, but investors can also leave a lot of money on the table by prematurely dumping all of their growth stocks. Instead, they should still buy promising growth stocks that aren't overly speculative.

Let's examine three tech stocks that fit that description -- Meta Platforms (META 1.64%), Veeva Systems (VEEV 2.19%), and CrowdStrike (CRWD 3.95%) -- and why they could all still be smart buys this year.

A person uses a Quest 2 headset.

Image source: Oculus.

1. Meta Platforms

Meta Platforms -- the parent company of Facebook, Instagram, WhatsApp, and Oculus -- is a great investment in the long-term growth of the digital advertising, augmented reality, and virtual reality markets.

A whopping 3.58 billion people, or nearly half of the world's population, use at least one of Meta's apps each month. That massive audience enabled Meta to build one of the world's top digital advertising platforms, which continued to grow even as it weathered antitrust probes, fines, and whistleblower scandals.

Meta still generates most of its revenue from ads, but it's likely sold over 10 million Oculus Quest 2 headsets over the past year, which gives it a firm hardware foundation to construct its VR metaverse. Horizon Worlds, its VR playground for Quest users, already marks the first major step toward the evolution of Meta's social networking platforms into VR experiences.

Meta faces near-term regulatory and platform-related challenges, but analysts still expect its revenue and earnings to grow 37% and 38%, respectively, this year. At 23 times forward earnings, Meta remains the cheapest FAANG stock and could head much higher in 2022 and beyond.

2. Veeva Systems

Veeva Systems provides cloud-based customer relationship management (CRM) software, data storage, and analytics services to more than 1,000 life science companies like GlaxoSmithKline and Moderna.

Veeva's platform helps those companies organize and maintain their customer relationships, store and analyze their data, and keep track of the latest industry regulations and clinical trials. Veeva doesn't face any meaningful competitors in this niche market, which has been steadily expanding as the competition heats up between big pharmaceutical and biotech companies.

Veeva's market dominance enabled it to grow its revenue at a compound annual growth rate (CAGR) of 29% from fiscal 2016 to fiscal 2021. Its adjusted net income increased at a CAGR of 45% over that period.

But Veeva's high-growth days aren't over yet. It expects its revenue to more than double again, from $1.47 billion in fiscal 2021 to about $3 billion in calendar 2025 (which includes most of fiscal 2026) as it launches more cloud-based services and locks in even more customers.

Veeva's stock might seem a bit pricey at 66 times forward earnings, but its reliable growth and dominance of the life sciences CRM market arguably justify its premium valuation and make it a smart growth stock to own.

3. CrowdStrike

Most traditional cybersecurity companies provide their services through on-site appliances. However, those appliances require constant maintenance and can be expensive to scale as a company expands.

CrowdStrike addresses those problems with Falcon, a cloud-native cybersecurity platform that doesn't require any on-site appliances. Falcon served 14,687 subscription customers in its latest quarter, a near-sixfold increase from just 2,516 subscription customers at the beginning of 2019.

CrowdStrike's revenue surged 93% in fiscal 2020, and rose 82% in fiscal 2021 (which ended this January). It anticipates 63% to 64% growth in fiscal 2022. Analysts expect its revenue to increase another 40% in fiscal 2023. It also turned profitable on an adjusted basis in fiscal 2021, and analysts forecast its adjusted earnings to grow 115% this year and rise 55% next year.

CrowdStrike continues to expand as it adds more cloud-based modules to Falcon, and its dollar-based net retention rate has remained comfortably above 120% ever since its IPO in mid-2019.

CrowdStrike's stock is undeniably expensive at over 220 times forward earnings and 22 times next year's sales. However, its high growth rates and disruptive cloud-based approach should still make it one of the best long-term plays on the growing cybersecurity market.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Leo Sun owns CrowdStrike Holdings, Inc., Meta Platforms, Inc., and Veeva Systems. The Motley Fool owns and recommends CrowdStrike Holdings, Inc., Meta Platforms, Inc., and Veeva Systems. The Motley Fool recommends GlaxoSmithKline and Moderna Inc. The Motley Fool has a disclosure policy.

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