CTwo years ago, the world was in captivity – and it’s unlikely to be the same again. Remote work (or remote and hybrid models in the office) is for staying away from the plague.
With so much pressure, though, comes flexible change. Due to advances in Internet technology and cloud-based software services, many industries were ready to shift to far-reaching jobs. Some, like creative work, have even grown thanks to companies Adobe (NASDAQ: ADBE), Unity software (NYSE: U)And Nvidia (NASDAQ: NVDA). Here’s why these three stocks look like a great buy right now for the long haul.
Adobe: Slow and steady Stewart in creative software
Adobe has been in trouble for decades. It survived the pop of the .com bubble, it faced a major crisis of 2008-2009, and it successfully moved the challenge of moving from traditional software to cloud-based services in the 2010s. Now Adobe is facing a new threat: the transition from a pure software technologist to a big industry startup. As investors come to terms with Adobe being a large and slow-growing company, its stock has taken a loss.
But slow growth does not mean growth. Adobe’s extensive toolbox for creative types and enterprise “digital transformation” points to a large market. Despite this size, management expects it to grow at an average youth percentage rate in 2022. In fact, it seems that the earnings per share may be temporarily hit as Adobe hits sales to Russia and the regional crisis related to the occupation is affected. In Ukraine, however, it remains a leading name for creative software and document management solutions – industries that still enjoy rapid development.
Since its last fall, Adobe stock has traded 31 times following a 12-month free cash flow. It still does not qualify as a “value” stock by traditional standards. But given Adobe’s steady growth story – and the 37% operating margin over the past 12 months – the stock looks like a time-consuming purchase if you plan to keep it for at least a few years.
Integration Software: Up and forth toolbox for 3D design
Speaking of cloud-based creative software, Unity was a hot IPO in 2020. The shares have remained on an up and down journey since then, but it is a good name for investing.
Metavers (or Metavers) has been a hot topic in recent months. Basically, the digital world is moving towards 3D and will offer a more profound experience in the future. This goes for video games – which are the bread and butter of unity – and also for workplace tools and services. The integration engine for 3D design also has application here. Engineering companies, producers, and filmmakers all use the design and collaboration software suite.
Unity’s revenue increased 44% in 2021, and management predicts it will rise another 35% in 2022. 3D design and the creation of in-depth digital experiences is obviously a great opportunity, so Unity intentionally works with little damage or is close to breaking. market share. The outlook for regulated operating profit margins is negative 3% this year. It’s all about expanding now, then profit.
For most investors, a company that burns cash out of its balance sheet is useless. But for those who like the path of growth, I expect warmth and invest in unity. And Stocks like Adobe to act as a counter balance. This is an exciting business, and it is currently trading at 14 times the expected sales this year. It’s not cheap, but it’s only a matter of months before it started trading. If you think the next decade is a promise for integration software, now seems like a buying opportunity.
Nvidia: A Case Study in Creativity Initiative
Let’s pivot from the software for a minute. Nvidia is a semiconductor company, one of which has roots in video games. In fact, just as video games have become the best source of entertainment for consumers around the world, video makes the most of this creative store. Its gaming segment reached .5 12.5 billion in sales last year (46% of the total).
But Nvidia’s technology for design and collaboration could go beyond high-charged growth in the future. The “professional outlook” component has been around for a while, but it has doubled in Q4 to 3 643 million year-over-year. This undoubtedly has a lot to do with the company’s Omniverse platform for 3D design, which had a general commercial presence last year and is constantly moving.
Omniverse represents a whole new market for Nvidia – indeed, a new land for every semiconductor company to date. It has software integration service at its core, and extends to any design work from video games to engineering to autonomous cars. Where did this initiative come from? During a call at the GPU Technology Conference last month, CEO Jensen Huang said remote and hybrid work was “good for Nvidia.” Teams at the company used Omniverse Elements before it became a commercial product, and its use during the epidemic has helped accelerate platform development.
NVIDIA is already big at gaming and data center artificial intelligence, and now it’s part of another powerful development to conquer. Again, this is not cheap storage. It follows a 12-month free cash flow for 72 times. But Nvidia pursues many secular trends – creativity software is the latest. This is a great buy if you have an ownership plan for the next decade.
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Nicholas Roswelllo and his clients are members of Adobe Inc., Nvidia, and Unity Software Inc. The Motley Fool is owned and operated by Adobe Inc., Nvidia, and Unity Software Inc. Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.