Tech Companies Letting You Down? 10 Stocks to Buy Instead

After an epic boom during the early stages of the pandemic, tech stocks have fallen sharply as we've moved into the reopening phase of the health crisis.

The Nasdaq is down 16% from the all-time high it reached in November, and high-growth tech stocks have gotten hit even harder.

Cathie Wood's flagship exchange-traded fund, ARK Innovation, is down by more than 50% since its peak early in 2021, and popular growth stocks like Shopify, Roku, and Teladoc have fallen by two-thirds or more.

It's a tough time to be a tech investor, in other words, but there's no reason you can't look elsewhere for returns.

Keep reading to see 10 stocks that can deliver even in a difficult environment.

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

If you’re looking for stocks that can thrive in a challenging environment, Costco (NASDAQ: COST) should be near the top of your list. The warehouse retailer is the third biggest in the country behind Walmart and Amazon, and its membership model gives it a competitive advantage in the retail sector.

Costco counts on membership fees for most of its profit, and its rock-bottom prices and high-quality products keep customers coming back. The company just reported double-digit comparable sales growth in March, showing the business remains strong despite tumult elsewhere in the market.

ALSO READ: What Is Costco's Competitive Advantage?

The e-commerce boom hasn't just been good news for online retailers. It's also lifted the industries that support online retail including logistics, and one winner has been GXO Logistics (NYSE: GXO).

GXO was spun off from XPO Logistics last year, and it's now the biggest publicly traded pure-play contract logistics company. It operates nearly 1,000 warehouses around the world, primarily in North America and Europe, serving companies like Apple, Nike, and Nestle, providing them with outbound and inbound logistics -- handling shipments and returns.

The company has also made significant investments in automation including collaborative robots and vision tech, giving companies a reason to outsource logistics.

Growth has been strong at GXO with revenue up 28% in 2021, and the company expects to grow both organically and through acquisitions as it's currently in the midst of taking over U.K.-based Clipper Logistics.

If you like tech stocks, investing in a big commercial bank like Wells Fargo (NYSE: WFC) might seem boring, but there are a lot of reasons to like banks, especially Wells Fargo.

With interest rates rising, commercial banks like Wells Fargo are set to capitalize as their net interest margins, or the difference between interest rates they pay on deposits and what they get on loans, should expand. Unlike some of its big bank peers, Wells is more focused on the commercial side than the investment banking side, giving it more positive exposure to rising interests.

The bank is still dealing with the fallout a few years ago from a banking scandal in which it fraudulently opened accounts for customers, but it should eventually get permission to raise its asset cap, which would help boost its recovery.

Currently, the stock trades at a P/E ratio of just 10, meaning it could easily move higher with the help of multiple expansion.

ALSO READ: Everybody's Talking About Wells Fargo

The recent spike in oil prices has been good news for energy companies, but those aren't the only winners. Green energy companies have also benefited as rising fossil fuel prices have promoted interest in renewable sources.

Brookfield Renewable Partners (NYSE: BEP) has been one of those companies. It's one of the world's largest operators of renewable power platforms, with projects spanning hydropower, solar, wind, and geothermal. It currently offers a dividend yield of 3.1% and is targeting annual returns of 12% to 15%, making it a good bet whatever happens in the tech industry.

Like Costco, Target (NYSE: TGT) is another retailer that has emerged as an industry leader thanks to a unique set of competitive advantages.

Only a few other retailers offer all of the product categories that Target does -- from food and beverage to clothing, electronics, and home goods -- but none are as balanced as Target.

The big-box chain also owns at least 10 billion-dollar brands, showing its strength at developing in-house products, and it's grown its digital sales significantly during the pandemic thanks to its same-day fulfillment program, including its curbside pickup program, Drive Up.

Target continues to open small-format stores and is investing in its omnichannel capabilities, which should continue to drive growth.

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

One stock that has surprisingly underperformed over the past two years is Disney (NYSE: DIS), the entertainment giant that has seen streaming service Disney+ take off.

However, that has come at the expense of its theme parks, cable, and box office movie businesses, which have all struggled during the pandemic.

The good news is that Disney+ will eventually be profitable and the theme park and movie business will bounce back as the global economy fully reopens.

In the meantime, Disney looks well priced, down a third from its peak last year, and it's poised to benefit from the economic reopening.

ALSO READ: Is 2022 Disney Stock's Year to Blow Up?

While tech stocks have plunged, commodity prices have soared and lumber companies are among the big winners.

That's good news for Resolute Forest Products (NYSE: RFP), a producer of lumber for wood products, paper, tissue, and pulp. Resolute has been shifting its business to wood products through acquisitions to take advantage of high demand for lumber.

The stock currently trades at a price-to-earnings ratio of 2 based on 2021's adjusted earnings results, meaning that there's a significant margin of safety even if lumber prices fall. However, with a shortage of housing across the country and a backlog of home-improvement projects as well, demand is likely to remain strong.

The cannabis sector has mostly been a bust in recent years, but Innovative Industrial Properties (NYSE: IIP) offers a unique value proposition.

Rather than grow marijuana or sell branded products, the company owns growhouses and leases them to growers.

As a result, IIP isn't affected by volatile marijuana prices and the company is consistently profitable. It's also fast growing, with revenue up 75% to $204.6 million in 2021 and adjusted funds from operations increased 78% to $175 million. That shows the business is highly profitable thanks to the unique role it plays in the cannabis industry.

ALSO READ: Best Marijuana Stocks in 2022

Real estate has been another rewarding sector during the tech meltodwn, and one company that keeps delivering is Prologis (NYSE: PLD).

The company is the world's largest industrial real estate investment trust in the world and owns hundreds of e-commerce warehouse that it leases to customers like Amazon, Home Depot, and FedEx.

The company has $215 billion in assets under management and an occupancy rate of 97%. With the tailwinds from the growth of e-commerce and high demand for warehouse space, Prologis should continue delivering steady growth.

The commodities boom has benefited not just materials and food companies but also adjacent companies like Deere & Co. (NYSE: DE), a leading maker of agricultural machinery.

Deere has been investing in new technology, including artificial intelligence that helps farmers know when and where to plant their seeds depending on weather and other factors.

Revenue rose 24% last year, and with food prices remaining elevated, Deere is well positioned for another strong year in 2022.

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

It's important to remember in investing that you don't have to own every stock.

While tech stocks were big winners over the past decade, the crash over the last year shows that it's a good idea to diversify beyond tech stocks as a number of other sectors have performed well during the period, including financials, energy, real estate, and commodities.

Nobody knows what the market will do next, but the stocks mentioned here can give you some upside potential beyond the tech sector.

Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jeremy Bowman owns ARK Innovation ETF, Amazon, Nike, Resolute Forest Products, Roku, Shopify, Target, Teladoc Health, Walt Disney, and Wells Fargo. The Motley Fool owns and recommends Amazon, Apple, Costco Wholesale, FedEx, Home Depot, Innovative Industrial Properties, Nike, Prologis, Roku, Shopify, Teladoc Health, and Walt Disney. The Motley Fool recommends Clipper Logistics and Nestle and recommends the following options: long January 2023 $1,140 calls on Shopify, long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2023 $1,160 calls on Shopify, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.