The analysts pick:

for Q4 2022

eToro’s analysts have chosen the companies you should keep an eye on this quarter

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Opportunities for investors in 2022

We are likely to continue to see market volatility for the final quarter — that has been present throughout 2022. However, despite market conditions, there are still opportunities out there for stock market investors. Picking the right type of investment continues to remain critical and a defensive approach could see investors make the best returns.


1. Visa (V)

  • With a $431.58 billion market cap, Visa (V) is the world’s largest publicly traded financial services company. It was responsible for more than 13 trillion transactions in 2021 and works with over 100 million merchants around the globe.
  • Visa is sitting comfortably as the world transitions from cash to digital currencies. It also benefits from the gradual rise in prices (inflation). This is because its standard digital money model takes a small cut of all digital transactions.
  • Visa has a history of outperforming market expectations. It is no longer the fastest-growing digital payment provider. However, its stability and consistent return on cash make it an attractive investment opportunity.
  • Visa suffered a massive blow in revenue in 2020 as a result of the pandemic, but has bounced back with a vengeance. The company faced new challenges in 2022 when it withdrew its services in Russia in response to the conflict in Ukraine. It also had to deal with the aggressive interest rate hikes imposed by the Federal Reserve to tame inflation, which had a huge knock-on effect on global exchange rates. Despite all this, Visa reported a revenue increase of 19% over the year.
  • Visa is one of the few companies not to report low profitability during this period of economic disruption. On the contrary, the company's net income increased 32% year- over-year with an almost unbelievable profit margin of 46.6% (as of August 2022).
  • Next earnings release: Expected October 22nd, 2022

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2. Alphabet (GOOG)

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3. ASML Holdings (ASML)

  • Semiconductor equipment manufacturer ASML Holdings has held up better than many other technology companies in these turbulent times. While it certainly hasn’t been immune to the effects of the COVID-19 pandemic, it has held its own. Now many investors are contemplating how well the company will handle the current economic crisis and the threat of recession and inflation.
  • ASML controls almost 90% of the lithology systems’ market for the semiconductor industry. Some of its biggest customers include Intel, Taiwan Semiconductor Manufacturing and Samsung.
  • The company has spent the last two decades developing the latest EUV (extreme ultraviolet) lithology machines. These are now being used to create the world’s smallest and most advanced chips.
  • ASML is set to be a dominant player in supplying the components for the world’s semiconductor manufacturers in the long term. They have a monopoly on EUV technology lithography machines, and they are needed to continue to make smaller, more efficient chips.
  • In 2021, the semiconductor market grew by 26.3%, and ASML generated an impressive €9 billion in sales in the first six months of 2022. The company expects to end the year with 10% growth in revenue over the 2021 total revenue of €18.6 billion. The company’s current backlog confirms that this strong revenue growth is likely to continue.
  • Next earnings release: Expected October 25th, 2022

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4. Amazon (AMZN)

  • Amazon posted a better-than-expected result for its second-quarter earnings release. As a result, AMZN stock prices have climbed an impressive 14% since the latest numbers were announced, pleasing many current investors (as of August 2022).
  • While Amazon’s Q1 2022 results were poorer than the e-commerce platform had hoped for, the company fared better in Q2 and gave Wall Street a pleasant surprise with Q2 revenue sitting at $121 million — surpassing all previous guidance and expectations. In addition, it posted an operating income of $3.3 billion, beating the expectation by over 10%.
  • While Amazon will never be considered a cheap stock, it is the leading player in the global cloud services market. In addition, the company’s infrastructure as a service model involving sharing costs and technologies, means the company can ramp up or ramp down its services and capacity, rapidly increasing business efficiency. With over 85% of organisations choosing cloud native technologies by 2025, now could be a good time to invest as Amazon grows in this market.
  • Amazon is trading at 2.2 times forward sales, the lowest it has traded since 2016. It also trades at a significant discount when compared to its cloud dominant competitors, Microsoft (MSFT) and Alphabet (GOOG). Amazon is a labour-intensive operation compared to its competitors. Its profits are impacted by the higher wage inflation.
  • Next earnings release: Expected October 27th, 2022

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5. Exxon Mobil (XOM)

  • Oil giant Exxon Mobil, trading as XOM, saw share prices rise 4.3% after the release of its Q2 reports. It was a mixed report which saw sales lower than expected, but profits far exceeding predictions. Analysts predicted investors would earn $3.74 per share but the company far exceeded this by earning $4.14 per share instead.
  • Ramped-up production, almost record high oil prices and margins coupled with aggressive cost controls all helped Exxon achieve its most profitable quarter ever. Exxons earnings grew more than 280% year-on-year.
  • Exxon built up an exceptional cash flow and reinvested its money in its refinery business. Exxon has also increased its annual dividend to $15 billion.
  • It’s true that higher oil prices are clearly a positive for ExxonMobil’s bottom line: it doesn't have as much downside from lower oil prices as some of the upstream oil companies due to its comprehensive refining and chemicals businesses.
  • A pullback in July has reduced shares 20% from their 52-week high, creating an attractive entry point for investors, even when you take into account the 40% gain over the previous 12 months.
  • Next earnings release: Expected November 4th, 2022

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