Top Stocks to Watch in February 2022
Feb 1, 2022
Despite the aggressive two-day rally to close out January, the Nasdaq-100 (NDX) is still down 8.5% so far in 2022. Additionally, the index is 10.9% off all-time highs, set on November 11th of last year. This all comes after a stellar 2021 which saw the Nasdaq rise over 26%.
Many of the nation’s top companies reported earnings in January, including some key stocks in the Nasdaq-100. These names included Microsoft (MSFT), Apple (AAPL), Netflix (NFLX) and Tesla (TSLA).
Setting our sites forward, the majority of Nasdaq-100 companies will report earnings in February. We took a look at five Nasdaq stocks to keep an eye on this month. These include three of the top 10 holdings, as well as two smaller firms:
Earnings Date: February 3rd (After the Close)
While 2021 was an extremely strong year for the Nasdaq-100 (and the S&P 500), Amazon was of little contribution to either rally. Returning only 2.4% for the year, before slumping 10% in the last month. 2021’s lackluster return didn’t come without its share of volatility as the stocks range for the year was from $2881 to $3773. Amazon investors are hoping for a return to former glory and more impressive returns in 2022.
Amazon beat earnings expectations in three of the last four quarters, only missing for Q3 of 2021. While Amazon saw steady revenue growth over the past two years, operating profit for Q3 last year dropped 21% compared to Q3 of 2020 and was also the lowest quarterly operating profit since Q2 2020.
Given Amazon’s size in the Nasdaq index and earnings expected February 3rd after the close, anticipate a reaction in Nasdaq futures as Amazon will likely be a key determinant of how the index moves overnight and into February 4th.
Earnings Date: February 2nd (After the Close)
The company formerly known as Facebook, Meta Platforms, was dealt blow after blow in the second half of 2021 into early 2022. Changes to Apple’s privacy technology on devices led to poor outlook for all social media firms. This was coupled with whistleblowers and congressional hearings around Facebook’s general ethical practices. Lastly, of course, Meta has been hit with the same general selloff we’ve seen throughout equities, primarily in tech.
Late into last year revenue and operating profits saw huge year over year growth. Q1 2021 saw operating profits up 93% compared to the same quarter in 2020. Q2 operating profits were 107% higher than those of Q2 2020. Q3 slumped a little up only 29% versus Q3 2020. As the market waits for Meta’s Q4 results on February 2nd it will be compelling to see the full impact of any lost revenue opportunity thanks to Apple’s software, as well as any influence resulting from continued social disdain of the company.
Earnings Date: February 16th (After the Close)
One of the key targets of the buzzword “supply chain shortage”, NVIDIA saw an impressive return for 2021, similar to rival Advanced Micro Devices (AMD). While both stocks have suffered in the tech slump investors may still be optimistic for a recovery, along with the rest of the tech sector.
Earnings per share (EPS) values slumped the past two quarters, back to levels seen pre-pandemic. If supply chains do ease back up and NVIDIA can better meet demand for its graphics cards investors will hopefully see a return to stable EPS growth seen in the latter half of 2020 and early 2021.
Earnings Date: February 24th (Before the Open)
Now a household name, Moderna’s share price closed below $20 at the end of 2019 before taking off in 2020 and then skyrocketing to nearly $500 in August 2021. Now at a less eye-watering $170, Moderna has been a volatile ride for anyone brave enough to trade it the last two years.
Moderna has now returned a positive, and increasing, EPS values for the last three quarters. This month’s earnings report is not until February 24th, after Feb options expiration. Whether looking to trade Moderna prior to, or through earnings, traders should keep in mind that the stock’s volatility is likely here to stay.
Earnings Date: February 24th (Before the Open)
Activision-Blizzard (ATVI) largely stole the spotlight for video game business news in recent history, first with depressing sexual harassment allegations, then with a takeover announcement as Microsoft looks to buy the company. Given the lack of headlines it may be easy to forget about Electronic Arts. However, the stock trades with good stock volume and respectable open interest in the options market.
Like Amazon, Electronic Arts underperformed the market last year, down 7.7% in 2021. This came on the heels of strong “stay-at-home” fueled 2020 rally, returning 34%. The stock price losing steam in 2021 makes sense when looking at the year-by-year EPS data. After limited growth in the prior four years, annual EPS jumped from $3.36 in 2019 to $10.37 in 2020, falling to $2.90 in 2021. Time will tell how Electronic Arts performs in this new landscape as if the Activision-Blizzard acquisition goes through.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastytrade content is provided solely by tastytrade, Inc. (“tastytrade”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. tastytrade, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastytrade is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparison, statistics, or other technical data, if applicable, will be supplied upon request. tastytrade is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer. Options, futures and futures options are not suitable for all investors. Prior to trading securities products, please read the Characteristics and Risks of Standardized Options and the Risk Disclosure for Futures and Options found on tastyworks.com.
tastytrade is a trademark/servicemark owned by tastytrade.
tastyworks, Inc. ("tastyworks") is a registered broker-dealer and member of FINRA, NFA and SIPC. tastyworks offers self-directed brokerage accounts to its customers. tastyworks does not give financial or trading advice nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastyworks’ systems, services or products. tastyworks is a wholly owned subsidiary of tastytrade, Inc (“tastytrade”).
tastyworks, Inc. (“tastyworks”) has entered into a Marketing Agreement with tastytrade (“Marketing Agent”) whereby tastyworks pays compensation to Marketing Agent to recommend tastyworks’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastyworks. tastytrade is the parent company of tastyworks. tastyworks and Marketing Agent are separate entities with their own products and services. tastytrade has different privacy policies than tastyworks.
Quiet Foundation, Inc. (“Quiet Foundation”) is a wholly-owned subsidiary of tastytrade The information on quietfoundation.com is intended for U.S. residents only. All investing involves the risk of loss. Past performance is not a guarantee of future results. Quiet Foundation does not make suitability determinations, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of Quiet Foundation’s systems, services or products.
Small Exchange, Inc. is a Designated Contract Market registered with the U.S. Commodity Futures Trading Commission. The information on this site should be considered general information and not in any case as a recommendation or advice concerning investment decisions. The reader itself is responsible for the risks associated with an investment decision based on the information stated in this material in light of his or her specific circumstances. The information on this website is for informational purposes only, and does not contend to address the financial objectives, situation, or specific needs of any individual investor. Trading in derivatives and other financial instruments involves risk, please read the Risk Disclosure Statement for Futures and Options. tastytrade is an investor in Small Exchange, Inc.