Crisis? What crisis? Despite the global economic slowdown, US cybersecurity company Fortinet continues to grow. For 2022, the company forecasts revenue of $4.4 billion, up 33% year over year. And that’s not all. In the longer term, Fortinet aims to hit $8 billion in revenue by 2025, equating to annual growth of 22%, with a margin of more than 25%. These forecasts and the company’s size make Fortinet look like a safe bet. Despite this, the company’s share – one of the five best performing stocks in the S&P 500 in 2021 – has lost more than 20% of its value since the beginning of 2022, whereas the Nasdaq 100, the US technology sector index, has lost nearly 30%. For analysts covering the stock, the current decline in Fortinet’s share price offers a window of opportunity for investors to buy into the company. A vast majority recommend buying shares.

After the boom in 2020 and 2021, the consumer electronics sector, which has the highest demand for semiconductors, has seen a dramatic slump this year. For example, PC sales plummeted 19.5% in the third quarter compared to the same period a year earlier, i.e., the biggest drop in more than two decades, according to research from Gartner. That marks the fourth consecutive quarter of decline. The situation will seriously impact the sales of fabless chipmakers like Nvidia and AMD. Nvidia’s Q3 revenue totalled $5.93 billion, down 17% from the third quarter of 2021. Since January, the firm’s share has lost almost half its value. However, most analysts believe that Nvidia stock has bottomed out and is poised to rebound.

Nvidia shares are undervalued, Morningstar said in a report published on 18 November. The US financial services firm believes that investors with a long-term horizon should find Nvidia attractive. A resounding majority of analysts recommend buying shares. What’s their reasoning? While gaming-related revenue – closely interconnected with markets for PCs and cryptocurrencies – fell 51% in the third quarter to $1.51 billion, the California-based firm is leveraging its technological NVDA edge to gain a foothold in the fast-growing cloud sector. The company sells the GPUs (Graphics Processing Units) built into data centres owned by cloud giants like Amazon and Microsoft. In the third quarter, Nvidia’s cloud revenue rose 31% to $3.83 billion, while automotive revenue climbed 86% to $251 million. And it’s not about to stop. Morningstar expects the data centre segment will grow at least 40% this year, thanks to strong demand for the H100 GPU – Nvidia’s latest addition to the range – from Amazon, Microsoft and Alphabet.

Stock markets can behave erratically. Since 1 January 2022, the share price of the German semiconductor manufacturer Infineon Technologies has fallen by 22%, compared to the 11% drop in the DAX – Germany’s main stock market index, which includes Infineon. However, the firm posted a 29% increase in revenue to €14.22 billion and a profit of €2.18 billion for its financial year ended 30 September 2022, almost double the previous year. And the outlook is also positive. For the financial year ending in September 2023, Infineon forecasts revenue of around €15.5 billion (plus or minus €500 million), i.e., an increase of 9% for the median figure. As a sign of its confidence, in November the company announced that it was building a new €5 billion factory in Dresden. "Never has the environment been so favourable," Jochen Hanebeck, the CEO of the Munich-based company, happily announced at the earnings presentation on 15 November 2022.

With this strong performance, why have Infineon shares lost more than the market since the beginning of the year? In addition to the fact that, across the board, the technology sector has taken a beating from the markets in 2022, Infineon’s share has struggled due to the state of the semiconductor business. After a record year in 2021, the industry is showing signs of slowdown, with a decline in sales of consumer products (PCs, smartphones, televisions), which are the main consumers of electronic chips. But Infineon primarily produces electronic components for the automotive sector, which account for almost half of its revenue, an area where the chip shortage remains an issue. As a result, the German firm’s order book is crammed full, amounting to €43 billion – three times the company’s annual revenue. "We are driven by three megatrends: electrification, digitalisation and decarbonisation," Jochen Hanebeck says. And that makes analysts’ eyes pop. A large majority of them recommend buying the stock. The Geneva-based company STMicroelectronics is also enjoying the buoyant market trend, posting healthy financial results.

Founded by former Israeli soldiers and originally active in the military sector, Nice Systems has refocused its strategy on civilian markets and grown into a leader in cloud CX services. CX, for customer experience, here covers the integrated software solutions used by businesses to manage their end-to-end customer contact approach (call centres, after-sales service, data collection and protection, etc.), a mission-critical factor for any company.

Drawing extensively on artificial intelligence, Nice Systems’ solutions are used by firms as diverse as Morgan Stanley, Visa, American Airlines, Radisson Hotels, Accenture and Toyota Financial Services. With a strong presence in the US, but still based in Israel, Nice Systems has caught the attention of many analysts.

The firm reported 12.3% revenue growth in the third quarter from the same period a year earlier, to $554.7 million, and a 33.6% jump in operating income to $90.3 million.

A spectacular plunge. Since the beginning of 2022, Twilio’s share price has lost more than 80% of its value. The Californian company, which develops an online customer relationship management platform, benefited from the lockdowns during the pandemic to soar to stock market heaven. Between January 2020 and January 2021, its share price rose 400%, from around $100 to over $400. This stunning rise was perhaps too fast, resulting in a brutal reality in 2022. The share is now worth less than $50.

However, analysts believe that the stock has sunk too far in light of the company’s potential. Now, the majority of them recommend buying the stock, due to Twilio’s strong growth. In the first three quarters of 2022, the company generated revenue of $2.8 billion, compared to less than $2 billion for the same period in 2021, an increase of 40%. Despite having more than 280,000 active customers, including large corporates such as Uber, Coca-Cola and Airbnb, the platform nevertheless posted a $35 million loss in the third quarter of 2022, down from the $8 million profit a year earlier. As a result, Twilio has not escaped the current wave of restructuring in the US tech industry: this autumn, the company laid off 11% of its employees, i.e., 800 to 900 people.

Most of the US companies on the cybersecurity bandwagon have felt the market’s wrath in 2022. The decline in cybersecurity shares seems even more ironic considering the growing number of cyber attacks worldwide. As Morningstar wrote in an article, "We expect demand for cybersecurity services to remain strong, driven by a high-threat environment."

Of the many firms operating in the sector, Morningstar singled out the US-based companies Okta and Zscaler. "We believe that these companies’ shares have fallen too far (ed. note: Okta’s share price has dropped 80% since the beginning of the year) due to rising uncertainty and interest rates, which has weighed on valuation multiples," the financial services firm said. The cloud security expert Zscaler is showing solid growth. Over the reporting year to end-August 2022, the company posted revenue of $1.09 billion, a 62% increase year over year, but with a $327.4 million loss. That has not discouraged analysts, however, as most still recommend buying shares.

Winner of numerous cybersecurity awards and honours in recent months, this Israeli company is a leader in digital identity management. Companies use its solution to enable secure access for employees from any device and any environment (local or cloud servers) via a single portal. CyberArk’s system is particularly effective in protecting privileged accounts (belonging to company users with access to sensitive data), which have become a critical target for cyber attacks. For its most recent quarter, the firm reported a 22.9% increase in profit to $120.2 million compared to the same period last year. A distinct majority of analysts recommend buying shares.

"Help build a better Internet." The slogan of cybersecurity firm Cloudflare is all about good intentions. However, since its creation in 2010, the Californian company has not been spared from controversy. Subscribers to its free services of protection against hackers (especially Distributed Denial of Service attacks) have mainly been administrators of sites praising the Islamic State and Al-Qaeda, as revealed by the Anonymous hacker collective in 2015. In 2019, Cloudflare had to stop working with the controversial 8chan platform, following the El Paso massacre, which appears to have been inspired by discussions on that forum. The company’s share price is also undergoing turmoil. After peaking in November 2021 at over $200, Cloudflare shares are now trading below the symbolic $50 mark.

Yet, despite the bumpy ride, the company continues its wild growth. Cloudflare forecasts revenue of between $974 million and $975 million in 2022, up from $656 million in 2021. That comes out to an increase of 48% year on year, and a profit of over $30 million. With that in mind, analysts covering the stock have made their call. Half recommend buying the stock, while the other half recommend holding it.

For most regular people in Europe, the software giant Salesforce is practically unknown compared to Microsoft. Founded in 1999, the company has nonetheless become a San Francisco landmark in the space of a few years, like the 326-metre-high Salesforce Tower, the city’s tallest skyscraper. The California-based company develops customer relationship management (CRM) software for businesses. In 2020, it acquired Slack, a platform offering online tools for project collaboration, for $27.7 billion. This acquisition has strengthened Salesforce’s position in competing with enterprise digital services from the behemoths Microsoft (Office 365 and Teams) and Amazon (Cloud Azure). During the pandemic, the use of this type of software sky-rocketed as masses of people began working remotely. Salesforce’s revenue rose from $17.1 billion in 2019 to $26.5 billion in 2021, with the company’s share price increasing from less than $150 in January 2019 to more than $300 in November 2021.

Since that peak, Salesforce shares have taken a blow in 2022, like most tech stocks. But don’t blame it on poor financial results. Despite the crisis, Salesforce remains healthy and is growing fast, with revenue forecasts of $31 billion in 2022, an increase of 17% from 2021, and $50 billion in 2025. Attractive, therefore, to analysts, with a broad majority having issued a BUY recommendation.

On 12 September, Tinder celebrated its 10th birthday. The app revolutionised the dating service industry with its "swipe" feature for selecting or rejecting potential partners. But was it a happy birthday? If you look at the numbers, the answer is a definite yes. With 450 million downloads since its launch, 1.5 million "dates" per week and 75 billion "matches" in 10 years, Tinder is the most downloaded dating app in the world. But from a stock market perspective, the situation is more complex. The share price of Match Group – the parent company of Tinder as well as the dating apps Meetic, Match and Hinge – has been divided by four since its peak in October 2021. For the year to date, the stock has been one of the worst performers in the entire Nasdaq 100 Index. Its main competitor, Bumble Inc. (which owns the eponymous dating app – and the world’s number two dating app – along with Badoo and Fruitz) has lost more than 35%of its value since the beginning of the year.

Has online dating lost its mojo? Quite the opposite. According to Grand View Research, the dating market is expected to grow by 5.5% per year, reaching $12.25 billion in 2030, up from $7.5 billion in 2021. In the third quarter of 2022, Match Group’s revenue increased 1% from the same period in 2021, with a 2% increase in paid users. The only downside is that the dating sector has now reached maturity and the saturation point is looming in terms of supply. This has not kept analysts from being optimistic about Bumble and Match, as most of them recommend buying both shares.

Datadog serves organisations of all shapes and sizes, including Samsung, Maersk, Siemens, Lufthansa, WholeFoods and DreamWorks, to name just a few of its thousands of customers. Founded by two French engineers, the New York-based firm provides tools used to monitor and analyse business metrics on the performance of their cloud infrastructure, offered for example by Amazon Web Services, Microsoft Azure and Google Cloud. As enterprise cloud environments become larger and more complex, Datadog finds itself processing more and more data, and as fast as possible. It must therefore fine-tune its AI algorithms so that its customers can understand and gain control over what is happening in their systems.

Industry experts emphasise the addressable market’s strong potential for rapid, long-term growth. On 3 November, Datadog reported a leap in quarterly revenue of 61% year over year to $437 million. Operating cash flow came to $83.6 million, with free cash flow of $67.1 million.

Currently valued at $24 billion, the US company has also recently announced two solutions that will expand its scope of activity into cloud security. All these strong points make Datadog an analyst favourite, with a large majority giving the stock a BUY recommendation.

The markets needed reassurance, and they got it. On 19 October, the Dutch company Advanced Semiconductor Materials Lithography (ASML) published its 2022 third-quarter results: revenue of €5.8 billion, net income of €1.7 billion and, more importantly, record quarterly net bookings totalling €8.9 billion. The announcement shot ASML share price upwards, and it surged almost 50% between the beginning of October and the end of November. That was welcome news, as the stock had taken a beating in 2022, falling from $800 in early January to less than $400 mid-October. With the slowdown in consumer electronics sales (computers, smartphones, televisions), investors feared a slowdown in ASML’s orders. But it never came.

ASML has become the stock to own. The Netherlands-based firm manufactures machines used by almost all foundries, or semiconductor fabrication plants. ASML Its A-list customers include the Taiwanese firm TSMC, US-based Intel, Samsung in South Korea, and China’s SMIC. Operating a near-monopoly, ASML supplies 80% of the global market and 100% for the most recent equipment. Although the drop in sales of consumer electronics – where demand for chips is high – could have ricocheted through to ASML, the company has taken advantage of growth in cloud services. It expects strong results once again in the fourth quarter, with revenue of between €6.1 billion and €6.6 billion. Analyst confidence is high. Almost in unison, they recommend buying ASML stock, which is still trading at a discount of almost 25% from its level in January of this year.

If there is one tech stock that has remained relatively unscathed this year, it is US cybersecurity expert Palo Alto Networks. Over the first 11 months of 2022, the share price slipped only 5% and could even stand a chance of returning to its January 2022 level by the end of December. The Californian firm specialises in the two fast-growing sectors of Internet of Things (IoT) and cloud-native security. For its 2022 reporting period, ended 31 July, Palo Alto posted revenue of $5.5 billion, up 29% year over year, for a profit of $823.7 million. This strong financial health is set to last. In the first quarter of its 2023 financial year, Palo Alto brought in $1.6 billion, up 25% on the first quarter of 2022. The company also forecasts revenue of between $8.95 billion and $9.1 billion for the 2023 financial year, equating to growth of 20%. And analysts love it. They still recommend buying shares, even though the stock has been a smidgeon down this year.

US semiconductor giant Broadcom is at the centre of one of the biggest deals of the year. In May, it put up $61 billion in a cash-and-stock transaction to buy the US software company VMware. If the deal goes through, it will be the second biggest tech acquisition of the year, after Microsoft’s colossal $69 billion takeover of Activision Blizzard. But the acquisition, which is expected to be completed in 2023, has raised eyebrows from competition authorities. The Federal Trade Commission (FTC), the US antitrust watchdog, has opened an investigation, as has its British counterpart, the Competition and Markets Authority (CMA). But this isn’t a first for Broadcom. Originally specialising in semiconductors, the company has over the years ballooned into a tech conglomerate. While it still manufactures chips for external customers, including smartphone and computer manufacturers, it also sells finished products such as Wi-Fi routers and modems.

In recent years, Broadcom has sought to expand its software business through mega-acquisitions. In 2019, the firm took over Symantec, developer and distributor of the well-known Norton Anti-Virus, for $10.7 billion. One year earlier, the company also acquired CA Technologies, a US business software company, for $18.9 billion. Following those deals, customers of the two acquired companies winced at the price hikes applied by Broadcom, which the consulting firm Gartner dubbed “spectacular”. Investors, on the other hand, watered at the mouth. Between January 2019 and January 2022, Broadcom’s valuation increased threefold. The decline observed since the beginning of the year (down 20% over the first 11 months) has only strengthened its appeal to analysts, who almost unanimously recommend buying the share.

"Logitech is like a really nice house in a bad neighbourhood," as one analyst put it when we were preparing this report. Active in the ultra-competitive computer accessories markets (video conferencing, streaming, gaming, audio, mice, keyboards, etc.), the Swiss firm is nonetheless esteemed by a large majority of analysts. It is known for setting high standards for the quality and user-friendliness of its products, but also, increasingly, for their careful design. The brand has carved out a spot for itself at the forefront of video conferencing and gaming, both sources of long-term growth. Of the record-breaking number of new products (more than 20) unveiled last quarter, Logitech launched the G Cloud handheld gaming console in the United States, in partnership with the Chinese firm Tencent for the software. The gadget has received favourable reviews from critics. This test run could eventually grow into a major new market.

In 2020 and 2021, Logitech fully benefited from the pandemic lockdowns, posting a strong rise in sales. The explosion in remote working propelled the group’s share price to almost 120 Swiss francs in early June 2021. Next, a correction drove the share price sharply downwards, before it was caught up in the all-round tech stock debacle, falling below the 45 Swiss franc mark last October.

Despite today’s adverse market conditions (eroding consumer purchasing power, exchange rate fluctuations, supply chain problems), many experts feel that the Lausanne-based firm nevertheless has the arguments it needs to outshine its competitors. Logitech’s quarterly earnings report published at the end of October reassured analysts. Revenue was down 12% year on year to $1.149 billion, and profits fell 38,2% to $82 million. But amid the current crisis, a much worse performance had been feared. Relief showed through the day after the results were announced, in the sharp rise in Logitech’s share price. Since then, the stock has climbed by more than 25% and is currently hovering around 55 Swiss francs. The company trimmed its operating expenses by 15% in the last quarter compared to the previous year. Logitech maintains its revenue targets for the current financial year, expecting a decline within the range of 4% and 8%, as the holiday period is traditionally brisk with high sales volumes.