Think about personal computers in the early 1980s. The internet in the 1990s. Smartphones in the first decade of this century. All of them represented investing opportunities with tremendous potential.
You can't travel back in time to buy the top stocks in these areas. However, there are still some areas that could be massive opportunities that you can invest in with a new year right around the corner. Here are five unstoppable trends to invest $5,000 in for 2022.
1. Artificial intelligence
Artificial intelligence (AI) has already become commonplace in our lives. Some of the ways are easy to spot, such as the virtual AI assistants on phones and home devices. Others aren't as obvious -- for example, many websites use AI to improve their product recommendations. But you can bet that AI is going to play an even bigger role in the future.
There are plenty of AI stocks that you could buy. I'd put Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) near the top of that list.
Data provides the fuel for AI apps -- and Alphabet arguably has more data than any other company. Alphabet uses AI extensively in its apps. Its Waymo business is a leader in self-driving-car technology. And its DeepMind ranks as one of the leading researchers in advancing AI.
2. Digital payments
Cash isn't king anymore -- at least not the physical kind. The adoption of digital payments is rapidly pushing cash or cheques to the side. Maybe these physical forms of payment won't totally disappear anytime soon, but their use will almost certainly continue to decline.
PayPal (NASDAQ: PYPL) ranks as a top leader in digital payments. Its shares are down quite a bit from their highs this year. However, the long-term prospects for the company remain strong. PayPal has the most widely accepted online digital wallet. Its Venmo app is gaining momentum, especially with Amazon.com (NASDAQ: AMZN) beginning to accept it as a payment in 2022.
The company should have plenty of growth opportunities ahead as digital payments are used more frequently in brick-and-mortar stores. In the war on cash, PayPal appears to be a five-star general.
3. E-commerce
E-commerce stands as one of the top growth drivers for the increased use of digital payments. But while people have been shopping online for more than two decades, e-commerce is still only in its early stages. That's especially the case in emerging markets.
You won't find many better e-commerce stocks to buy than MercadoLibre (NASDAQ: MELI) in serving emerging markets. The company is the e-commerce leader in Latin America. The e-commerce market share penetration in the region is expected to double within the next four years. MercadoLibre will probably be the biggest winner as this happens.
The company is also pioneering digital payments in Latin America with its Mercado Pago platform. It offers fulfilment services including logistics and warehousing for merchants as well. With its e-commerce dominance and other products and services, MercadoLibre could make investors a lot of money over the next decade and beyond.
4. Genomics
A genomics revolution is underway. The ability to unravel the secrets of DNA is changing healthcare. Diseases can be diagnosed more accurately and quickly. Therapies are being developed that harness the power of genomics to treat and even cure diseases.
You won't have any problem finding stocks that could soar in this category. Vertex Pharmaceuticals (NASDAQ: VRTX), though, stands out as a top pick. The company currently enjoys a monopoly in treating the underlying genetic cause of cystic fibrosis. Its success in CF has enabled Vertex to build a promising pipeline.
Vertex and its partner, CRISPR Therapeutics, plan to file for regulatory approvals by the end of 2022 for a gene-editing therapy that effectively cures blood diseases beta-thalassemia and sickle cell disease. The big biotech is advancing a drug that targets the treatment of genetic kidney diseases into pivotal testing next year. And Vertex could even have a potential cure for type 1 diabetes in clinical development.
5. Metaverse
It seems like nearly everyone is talking about the metaverse after Facebook changed its name to Meta Platforms and unveiled an ambitious strategy for building the virtual universe. Estimates vary on how much money might be made in the metaverse, but several analysts project the amount will be in the trillions of dollars annually.
Nvidia (NASDAQ: NVDA) should be front and centre as the metaverse market explodes. The company has already launched its Omniverse platform for 3D simulation and design collaboration. Nvidia CEO Jensen Huang thinks that one component of this platform -- Omniverse Avatar -- could have an addressable market of $40 billion per year.
But perhaps the biggest opportunity for Nvidia is in supplying the graphics chips that will be needed to power metaverse apps. The company's graphics processing units (GPUs) are considered by many as the gold standard for gaming systems today. The metaverse seems likely to boost the demand for Nvidia's GPUs in a huge way. Nvidia could look like a no-brainer stock to buy in retrospect as the metaverse becomes a reality.
