Do you have $1,000? These 2 stocks could be good buys for 2022 and beyond

With the market well into bearish territory, many investors may wonder if it is time to take money out of the market. However, I think the wisest thing is to buy stocks.

While the short-term outlook may look bleak, the long-term picture remains intact for many companies, including Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) and Autodesk (NASDAQ:ADSK). So if you have some spare cash, buying a few shares of these two companies could make you look like a genius a few years down the line.


Alphabet is the parent company of YouTube, the Android operating system, and a wide range of Google products. Although it may seem like a diverse business, it is heavily focused on advertising. In fact, Alphabet derives over 80% of its revenue from advertising sources.

Companies everywhere are cutting advertising budgets as the economy heads into recession. That’s because it’s a manageable expense to cut versus layoffs or cutting projects.

Even so, in the second quarter, Alphabet managed to grow its revenue by 13% year-over-year. On October 25, investors will learn how Alphabet fared in the third quarter. However, 28 analysts forecast sales growth of 8.9% in the third quarter. So even in this increasingly difficult environment, Alphabet will likely continue to grow.

As for earnings, Alphabet saw its earnings per share drop from $0.15 to $1.21 in the second quarter. Alphabet CEO Sundar Pichai has previously discussed cost-cutting measures and hiring slowdowns; I expect earnings growth to return eventually.

When ad spend returns as the economy recovers, Alphabet’s cost-cutting measures will still be in place. At that time, I expected Alphabet shares to rise rapidly.

For now, Alphabet shares are trading at a favorable valuation of 16.2 times earnings. Compared to the S&P500With a price/earnings ratio (P/E) of 17.4, Alphabet is trading at a slight discount to the market.

Alphabet is a leader in the advertising market and continues to grow at a time when many constituents of the S&P 500 will decline. I think now is a great opportunity to take a position in Alphabet shares, especially with it down more than 30% from its all-time high.


Unlike Alphabet, Autodesk does not rely on ad revenue. Instead, its software is purchased on a subscription basis. Engineers and architects use Autodesk products daily to get their work done, making it a must-have product that they can’t undo.

With the subscription product, Autodesk can continually raise prices in good times and bad. This power has been reflected in the COVID-19-induced recession.

Image source: Autodesk.

Even though the COVID-19 recession was short, what lies ahead is likely to be much longer, or a recession may not appear at all. Either way, the subscription model will thrive.

In Autodesk’s second quarter of fiscal year 2023 (ended July 31), revenue grew 17% from a year ago. Additionally, its non-GAAP (adjusted) operating margin increased five percentage points to 36%.

These are strong results in a challenging environment, but management expects strong double-digit revenue and free cash flow growth throughout fiscal 2026 (January 31, 2027). Subscription revenue is much easier to predict, making it easier to predict growth and spending, leading to efficiencies.

With Autodesk’s core product, predictable growth, and efficiency metrics, this is an exceptional stock to own. It is also reasonably priced at 25 times forward earnings.

Autodesk is one of the top stocks to buy right now because no matter how the economy plays out, it will maintain growth solely because of its business model.

10 stocks we like better than Alphabet (C stocks)
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Suzanne Frey, an executive at Alphabet, is a board member of The Motley Fool. Keithen Drury holds positions at Alphabet (C shares) and Autodesk. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares) and Autodesk. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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