2 high-tech stocks ready for a bull run

It looks like tech stocks will finally wake up in 2022 after a long slumber Nasdaq Composite (^IXIC 0.12%) It rose 13 percent year-to-date through Feb. 17 as investors reacted favorably to a slowdown in inflation and the Federal Reserve’s decision to cut interest rates.

In the year After peaking in late 2021, prices in the technology sector have fallen sharply, presenting several attractive buying opportunities. On that note, there are two tech stocks that look poised to rally right now.

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1. Free market

Free market (Melly 1.46%) It is the most famous Latin American e-commerce company, but it is much more than that. It is also a digital payments powerhouse through Mercado Pago, and has operations in logistics, credit and asset management.

The company posted a strong profit growth in the third quarter thanks to its advertising business. Love a lot AmazonMercadoLibre is using its ability to run ads on the electronic shopping market, because the company benefits from the position at the bottom of the fund, consumers are coming to the website with the intention of making a purchase.

In the third quarter, it reported an 11% operating margin, helped by growth in advertising and credit businesses.

Unlike many of its e-commerce peers in the US, Mercado Libre continues to post strong growth in 2022, riding on the headwinds in online retail.

In the third quarter, currency-neutral gross merchandise volume, or the total value of goods sold on the platform, rose 32 percent to $8.6 billion, and total payment volume rose 76 percent to $32.2 million. As a result, revenue rose 61 percent to $2.7 billion, a far cry from the high-single-digit top-line growth that Amazon and its U.S.-based peers have been reporting.

This kind of growth and the collapse of its closest rival in Brazil Americans, in the accounting scandal, MercadoLibre has competitive advantages that seem as strong as before. If the company can deliver another round of strong results in its fourth-quarter earnings report on February 23, the stock could rise.

2. Advanced Micro Devices

It’s tough in the chip sector when commodity glut prices fall, eroding profits across the board. Even in such a challenging market. Advanced Micro Devices (AMD 0.13%) It managed to impress investors with its fourth-quarter report, and its stock jumped 12 percent on February 1.

AMD has not been immune to the ill health in the industry. While revenue rose 16 percent to $5.6 billion in early 2022 thanks to the Xilinx acquisition, gross margin fell 740 percent to 43 percent and adjusted operating income was just $1.3 billion.

Weakness in PC sales led to a 51% drop in revenue for the PC-based customer segment, and the company’s push in PCs and games led to a 10% drop in revenue in the first quarter.

But despite the pressure at the sector level, AMD will continue its smart move to grow in the long term. Xilinx’s acquisition into the embedded chip market in industries such as automotive, aerospace and wireless communications — and the data center — appears to be boosting its capabilities and complementing its core chip business.

And AMD consistently excels. Intel. The decision to outsource the production of chips gave it an advantage over its main competitor. After losing nearly $10 billion in free cash flow last year, Intel has been laying off workers and cutting wages, playing defense, even as it still pays investors about $6 billion in annual dividends.

AMD does not pay dividends, allowing it to put profits back into the growth of the business, which is an advantage in highly competitive industries such as semiconductors.

While the first half of the year is expected to be challenging for AMD, investors could be rewarded if it continues to deliver market share. And the long-term view of interest in artificial intelligence, along with current growth, adds to the stock’s upside potential.