2021 was another excellent year for US equities as some of Wall Street's major indices – the , and – all closed the year with strong gains, as optimism about the global economy played a powerful role despite ongoing concerns about COVID .
S&P 500, NASDAQ and Dow Chart
While there are plenty of reasons to be cautious about the stock market in 2022, mainly risks related to the Federal Reserve's tightening path and the ongoing coronavirus health crisis, these three proven winners will likely leave shareholders continue to deliver impressive returns in the coming years. new year.
1. Alphabet
Shares of parent company Alphabet (NASDAQ:) rose in 2021 and are well positioned to continue their march into 2022 thanks to rising demand for the tech giant's innovative products and services.
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GOOGL was the best performing 'FAAMG' stock last year, with annual gains of almost 65%. It ended Tuesday's session at $2,887.99, ahead of its all-time high of $3,037.00 reached on Nov. 19.
At current levels, the Mountain View, California-based internet search giant has a market cap of $1.92 trillion, making it the third most valuable company trading on the US stock exchange, after only Apple (NASDAQ:) and Microsoft (NASDAQ :).
Google's 2021 rally was fueled by signs of broad strength in the online advertising market and growing demand for its cloud platform, driving sales up 45% to $4.99 billion in . The company has invested heavily in its cloud business as it catches up with Amazon (NASDAQ:) Web Services and Microsoft Azure.
Additionally, Wall Street was encouraged by strong ad revenue growth from GOOGL's YouTube segment, which rose 43% from a year ago to a record $7.21 billion in the last quarter.
Looking ahead to 2022, Google is expected to see continued momentum from continued growth in digital ad spend as the economy continues to recover from COVID-related disruptions. The technology company's core ad revenue business saw a 43% Y-o-Y gain in the previous quarter to $53.1 billion.
Taking this into consideration, we expect GOOGL stocks to continue the strong upward trend in the coming year. Indeed, the quantitative models in InvestingPro point to a 15.9% increase in Alphabet shares from current levels over the next 12 months to a fair value of $3,348.46/share.
InvestingPro GOOGL Fair Value Chart
Source : InvestingPro
2. NVIDIA
Widely regarded as one of the world leaders in providing high-performance graphics processing units (GPUs) for game consoles, data centers and self-driving vehicles, NVIDIA (NASDAQ:) 2021 ended as one of the big winners of the year, with stocks gaining 125% thanks to rising demand for its chips.
Additionally, in recent months the company – which is the world's largest maker of video game chips – has stepped up its efforts to become a major player in the emerging metaverse space, seen as the next-generation version of internet
NVDA shares climbed to a record high of $346.47 on Nov. 22. It closed at $292.90 yesterday. At its current level, the Santa Clara, California-based tech giant has a market cap of $732.2 billion, making it the seventh most valuable company trading on the U.S. stock exchange, ahead of names like JPMorgan Chase (NYSE:), Walmart (NYSE). : ), and Exxon Mobil (NYSE:).
As a sign of how well NVIDIA's business has performed in the current environment, the chipmaker has filed reports that have surpassed Wall Street's earnings and revenue estimates in every quarter of last year.
That trend is likely to continue into 2022, as NVIDIA's guidance for the current quarter made it clear that the semiconductor giant doesn't expect a slowdown in the coming months, with revenue expected to grow 48% year-over-year to a record $7.4 billion.
In addition to the expected surge in demand for its chips used in game consoles and data centers, NVIDIA will also benefit from its growing involvement in the metaverse following the unveiling of its "Omniverse" software, a virtual world simulation and collaboration platform for 3D workflows.
As such, we expect the positive trend at NVIDIA to continue into the new year thanks to its status as one of the leading names in the booming technology sector.
Analysts also remain optimistic about the shares.
NVIDIA Consensus Estimates
Source: Investing.com
In an Investing.com survey of 42 analysts, 36 rated the stock as "outperforming", representing a 16% increase from current levels.
3. Roblox
Roblox (NYSE:) made headlines last year when the digital entertainment company made its well-received debut on the New York Stock Exchange in March 2021.
The San Mateo, California-based company posted a 48% profit, benefiting from strong demand for its wildly popular online platform that allows users to easily play and develop video games in 3D virtual worlds.
RBLX shares closed at $95.15 last night, giving the gaming platform provider a valuation of approximately $55.1 billion. At current levels, stocks are about 32% below their all-time high of $141.60 on Nov. 22.
Despite a recent pullback due to valuation concerns, we expect Roblox's stock to continue its remarkable performance in 2022 thanks to its emerging status as one of the leading names in the burgeoning metaverse space.
During recent analysts' day in November, business leaders said most consumer brands will likely need to adopt a metaverse strategy in the next three to five years as companies adapt to the changing digital landscape. That should bode well for Roblox, which already counts notable names like Nike (NYSE:), Chipotle Mexican Grill (NYSE:) and VF Corporation's (NYSE:) Vans shoes as customers.
The fast-growing technology company reported revenue when it released its third quarter financial results on November 8, fueled by strong user engagement and strong customer growth.
The gaming platform's average daily active users (DAUs), primarily teens and preteens, are up 31% from a year ago to 47.3 million in the last quarter. Those users spent 11.2 billion hours on the platform, a 28% increase over the same period last year.
Still, Roblox is not yet profitable as the company's third-quarter net loss rose to $74 million from $48.6 million in the same period last year, primarily due to increased costs related to its marketing, infrastructure and research and development.
Not surprisingly, 9 out of 12 analysts surveyed by Investing.com are optimistic about RBLX stock.
Source: Investing.com
The consensus among respondents predicted a gain of about 22% from current prices to $116.36/share.
