Despite the massive hit in the broader technology sector, investors should still consider the narrative that supports the best edge computing stocks to buy. In simple terms, edge computing refers to a series of networks and devices located close to end users. As you might suspect, the goal here is to improve efficiency by bringing processed “meat” closer to the source of demand.
Ultimately, the primary goal of most edge computing stocks is centered on improving productivity. In other words, it’s not about reinventing the computer, it’s about making it better. Sure enough, the segment is already of extraordinary relevance, with a valuation of $44.7 billion by 2022. Experts expect the sector to reach $101.3 billion by 2027 at a CAGR of 17.8%.
While certain market segments present a higher risk profile, the industry encompasses a broad spectrum, from public cloud providers to hardware manufacturers to content delivery networks. Here are various edge computing stocks to buy for the upcoming boom.
| amazon | amazon | $84.00 |
| Microsoft Corporation | Microsoft | $239.82 |
| letter | $88.73 | |
| Nvidia | Nvidia | $146.14 |
| network | Arista Networks | $121.35 |
| Arkham | Akamai | $84.30 |
| FSLY | fast | $8.19 |
Amazon (AMZN)
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The obvious pick to buy among the largest edge computing stocks, amazon (NASDAQ:amazon) have already graduated from e-commerce experts. Among its many high-profile business units, Amazon Web Services is its public cloud computing network. Despite its exceptional relevance, AMZN is currently occupying foreign territory: The stock has lost 52% of its equity value on a year-to-date basis.
I won’t block any fists. Such enormous volatility raises serious concerns about its viability. That said, it’s also fair to point out that the tech sector as a whole has been disproportionately hit in 2022. Growth-oriented AMZN has taken some hits, from global supply chain woes to geopolitical hotspots to the Federal Reserve’s hawkish monetary policy to keep inflation in check.
Bold contrarians in edge computing stocks, however, may want to take aim at Amazon. On the one hand, its related business units (such as its cloud network) should be more prominent. Likewise, Gurufocus.com’s proprietary calculation of fair market value shows that AMZN is significantly undervalued.
Microsoft (MSFT)
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A software and hardware giant, from a broader technology perspective, you can say you can’t go wrong Microsoft (NASDAQ:Microsoft Corporation). One of the many arguments I make in favor of MSFT centers on the underlying business ecosystem. Essentially, the company’s Windows operating system (OS) dominates the global desktop operating system market. Therefore, if you want to be successful in business, you must master Microsoft.
As businesses and individual professionals alike are drawn to cloud computing, MSFT will subsequently see more demand. On the topic of the best edge computing stocks to buy, Microsoft Azure is rapidly rising to support edge initiatives in both hardware and software.
To be fair, MSFT — like Amazon above — doesn’t represent a pure-play edge computing stock. This diverse profile amplifies vulnerabilities, thereby forcing MSFT down 30% year-to-date. However, as society normalizes, previously undervalued business units may come to the forefront, boosting share prices.
Alphabet (GOOG, GOOGL)
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One of the biggest names in big tech, no discussion would be complete without mentioning buying edge computing stocks letter (NASDAQ:GoogleNasdaq:Google). Through its Google Cloud network, businesses and individual worker bees can connect and collaborate, fostering (arguably) superior productivity. Likewise, the sheer strength and intuitive nature of the broader Google ecosystem brings a lot of appeal.
Since it seems like everyone uses Google—whether through its internet search engine or its Gmail service—the ecosystem represents an organic shift. This is especially important for the booming gig economy. As more and more people tire of the corporate 9-to-5 independent branch, they will need mechanisms for communicating with customers. Google is friendly, Google is familiar.
To be sure, what wasn’t too kind was Alphabet’s market performance. For example, Class C GOOG shares have lost more than 40% in value since the beginning of the year. Still, Google’s cloud network offers a compelling story as workplace norms change. As such, it’s one of the best edge computing stocks around.
Nvidia (NVDA)
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Maybe when most people hear the name Nvidia (NASDAQ:Nvidia), their minds immediately conjure graphics processing units for video game applications. While it’s one of the company’s main business segments, Nvidia is also one of the best edge computing stocks to buy, especially in the hardware sector.
Basically, Nvidia GPUs, which are used to accelerate the computing process, have also been integrated into cloud-based data centers. In addition, Nvidia is using its keen insight for innovations that could benefit from edge computing infrastructure, such as self-driving cars. Obviously, with automated shipping, you want the data to be as close as possible to the source of demand. Unsurprisingly, Nvidia represents one of the leaders in this exciting space.
To be fair, NVDA’s market performance wasn’t all that exciting. It has lost more than 53% of its stake value since the start of the year. Also, shares have been hit hard due to continued weakness in the semiconductor sector. However, as I mentioned recently, the silver lining centers on analyst ratings. Wall Street pundits still rank NVDA as a Consensus Strong Buy.
Arista Networks (ANET)
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One of the pioneers of software-driven cloud computing devices, Arista Networks (New York Stock Exchange:network) makes an interesting case for buying edge computing stocks. That’s because Arista has recently focused on what it calls a “campus cloud,” essentially building smaller data centers for corporate private use. In other words, the company extends its strengths to a very local level, with potentially myriad efficiencies.
Cybersecurity Another factor that should support ANET as a candidate for an edge computing stock is cybersecurity. According to the underlying company’s website, “Arista is the only modern AI-driven security platform that provides key building blocks for zero trust policy, automation and advanced, threat hunting, and network forensics.”
Like other edge computing stocks, 2022 is not looking good for ANET, with shares down 16% year-to-date. However, the second half of the year presents an auspicious story heading into 2023. Over the past six months, ANET’s market capitalization has risen nearly 26%. It’s a topic to watch as the new year approaches.
AKAM
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Content delivery network heavyweight — focused on moving and securing data between entities — Akamai (NASDAQ:Arkham) easily ranks among the best edge computing stocks to buy. According to its website, “Akamai has deployed the most pervasive, highly distributed content delivery network (CDN) with approximately 345,000 servers in more than 135 countries and more than 1,300 networks worldwide.”
Unfortunately, Wall Street isn’t seeing the full potential of AKAM just yet. Shares are down 28% since the start of the year. However, as the demand for cloud computing increases, so should the need for CDN service providers. Temptingly, AKAM is marketed at 14.4 times forward earnings. This compares to the industry median of 23.3 times.
This could be a deal too good to pass up. At the very least, it should merit further investigation.
Additionally, AKAM has a Moderate Buy rating among the analysts covered. Perhaps most tellingly, hedge funds have already started bidding for AKAM, especially compared to the fourth quarter of 2021.
Fast (FSLY)
Sometimes you need to take some risks in life to move on. But does this sentiment apply to edge computing stocks?leadership team in fast (New York Stock Exchange:FSLY) probably wants you to think so. CDN experts, in the middle of the post-epidemic new normal, Fastly is the leader. For example, between late 2020 and early 2021, FSLY will occasionally hit triple-digit average price tags.
Unfortunately, things have taken a turn for the worst in recent months. Currently, the stock is trading at just over $8 per share. In terms of performance, this framework translates into a nearly 78% YTD loss. Not surprisingly, investment resource Gurufocus.com flagged Fastly as a possible value trap. So why would anyone consider FSLY one of the edge computing stocks to buy?
Fundamentally, the basic CDN market is likely to grow at a CAGR of 23% from 2022 to reach $95.37 billion in industry revenue by 2030. When evaluating smart money, tip ranking Noting that hedge funds are “very positive” on FSLY.
Dangerous as an F bomb, let me be 1000% clear. But if you want to roll the dice, you can use Fastly.
On launch day, Josh Enomoto Do not have (directly or indirectly) any position in securities mentioned herein. The views expressed in this article are those of the author and governed by InvestorPlace.com Publishing Guidelines.
