The massive sell-off in technology stocks this year means that investors can get their hands on the stock of some terrific companies that could shape our future at relatively attractive valuations.
The Nasdaq-100 Technology Sector index has slipped about 30% so far in 2022, so it is not surprising to see that some of the top names that make up the index have been crushed as well. Nasdaq stocks such as Apple (AAPL -5.64%) and Amazon (AMZN -7.16%) have borne the brunt of the market sell-off in 2022.
Given the robust long-term prospects for these two companies, it would suggest that now might be a great time to buy these stocks. Let’s take a closer look at why Apple and Amazon could give investors’ portfolios a nice boost in the long run.
The arrival of the 5G smartphone era has been a big tailwind for Apple. The company has been enjoying impressive growth in iPhone sales volumes along with an improvement in the average sales price of each smartphone that it sells. This was evident from Apple’s fiscal 2022 second-quarter results for the three months ending on March 26, which revealed a 9% year-over-year growth in revenue to a record $97.3 billion.
With the 5G smartphone market anticipated to grow at an annual pace of 124% through 2025, it won’t be surprising to see Apple clock impressive growth in the coming years, as it controls a 31% share of this space.
This, however, is just one of the many reasons to buy Apple stock. The company is looking to take advantage of emerging tech trends that could supercharge its growth for a long time to come.
For instance, Apple is reportedly developing a mixed reality headset powered by both augmented reality (AR) and virtual reality (VR) as per patent filings. The tech giant is expected to launch such a device in 2023, followed by smart glasses by 2025. Apple’s jump into the AR/VR headset market could turn out to be a lucrative move, as market research firm IDC forecasts that this space could grow at an annual pace of 35% through 2026.
On the other hand, it looks like Apple is stepping on the gas as far as the development of its autonomous electric vehicle is concerned. Though the company hasn’t made any official statement about its vehicle development program, its recent hiring of an experienced Ford engineer indicates that such a product may be in the cards.
Analysts expect Apple’s car to be launched in 2025. While that timeline may seem a tad aggressive, it is worth noting that the company has a fleet of cars that are reportedly testing its autonomous driving technology. What’s more, Morgan Stanley analyst Katy Huberty believes that Apple’s move into the automotive market could pave the way for the company to double its revenue and market capitalization.
All this indicates that Apple is built for solid long-term growth. That’s why investors looking to take advantage of the tech stock sell-off should consider buying shares of Apple. They are currently trading at 24 times trailing earnings, which is lower than the Nasdaq-100’s multiple of 26.
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