Cloud computing is one of the most exciting segments of the technology sector going into 2022. The industry is expected to experience growth as companies look to capitalise on emerging digital advertising ecosystems and the emergence of non-fungible tokens (NFTs) and metaverse in the cryptocurrency market. Here are our top picks going into 2022.
Shopify
Shopify Inc. (NYSE:SHOP) shares have pulled back more than 18% since the 19th of November, trimming this year’s gains to under 26%. The company recently launched an NFT platform allowing merchants to create, buy, sell and swap NFTs.
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This could attract new customers boosting topline growth. Although the stock seems to be overvalued, analysts expect its EPS to grow by a whopping 334% this year, before increasing at an average annual rate of 28.76% for the next five years.
Technically, the stock seems to be trading within a descending channel formation in the intraday chart. It has recently pulled back after finding the trendline resistance, creating an opportunity for a rebound.
Therefore, investors could target profits at about $1,460, or higher at $1,550, while $1,283 and $1,189 are crucial support zones.
Adobe
Adobe Inc. (NASDAQ:ADBE) is another cloud stock that could benefit from the emerging trend of metaverse gaming and digital land sales. The creative cloud company’s design software could attract more interest as creators pounce to launch projects in the metaverse.
The stock trades at a reasonable forward P/E ratio of 35.05 whilst offering exciting earnings growth prospects of more than 80% this year and an average annual rate of 15.35% over the next five years.
Technically, Adobe shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock recently fell to find the trendline support, triggering a rebound.
However, with shares yet to reach overbought conditions, investors could target extended gains at about $529.4, or higher at $560.4, while $482.8 and $452.7 are support levels.
Trade Desk
With the video streaming industry continuously attracting more players, some companies have adopted ad-supported revenue models. Trade Desk Inc. (NASDAQ:TTD) is a cloud services company that provides marketers with programmatic advertising software.
It is now the largest independent digital ad management software company, competing with the likes of Alphabet Inc. (NASDAQ:GOOG) and Meta Platforms Inc. (NASDAQ:FB).
Although the stock looks substantially overvalued, analysts expect its EPS to grow by more than 118% this year before rising at an average annual rate of 32% over the next five years.
Technically, TTD shares have recently completed a bullish breakout from a descending channel formation.
With the stock far from reaching overbought conditions, investors could target extended rebounds at about $104.12 and $111.42, while $87.92 and $80.36 are crucial support zones.
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