University of Minnesota Student News

The Great Stock Market Crash Of 2022. Will We Ever Recover?

February 19, 2022

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2021 wasn’t the best year for tech or crypto investors by any means. Many long term investors saw great losses while shorts made a fortune. As for 2022, it seems as if we are on a similar trajectory. The market as a whole has taken a significant dip since the new year as the S&P 500 is down 6.70 percent, NASDAQ is down 13.73 percent, and the Dow Jones is down 4.51 percent. Many of the top growth stocks from the pandemic era have been crumbling as the threat of rising inflation starts to become a reality. On the other hand, the banking and financial service industries have been thriving. As the market moves from bull to bear as quick as it has been, long term investors have been begging the question of when to enter back in. It’s tough to predict the bottom of this slump especially when we have our trust in Biden as well as the possibility of conflict with Russia. That being said there are a few options you should keep your eyes on in the near future. 

During the pandemic many Americans signed up for the already popular streaming service Netflix ($NFLX) which led to a large increase in revenue. At its peak, Netflix had a share price of $700, but as of lately the stock has been getting beaten down. They currently sit at a mere $400, close to their 52 week low of $351. Although the streaming service has seen a decline in subscriber growth since the pandemic, the company still holds a significant market share and expects to add another 2.5 million subscribers in the first quarter of 2022. Netflix should recover smoothly to its high’s in the long term. 

Alphabet Co. ($GOOGL) recently announced they will be executing a 20-1 stock split in July 2022. This comes following Apple Inc’s ($APPL) massive split in 2020. $GOOGL currently sits at $2,754.76 a share as of market close February 16. If $GOOGL acts similarly to $APPL we can expect a gradual growth following the split. This split will make their stock more attractive to retail investors who’ve been eager to get into a position they can trust. $GOOGL is a long term buy and hold. 

A company you should avoid is the at-home live fitness platform, Peloton Interactive Inc. ($PTON). Peloton saw massive user growth during the pandemic since no one could go to gyms for exercise. Since the pandemic slowed, their user base fell dramatically. Although they sold many units during their reign, they have struggled to retain monthly subscribers. This, along with many internal issues, have contributed to the downfall of this company. Peloton Interactive is currently $32.05 a share, down 76.98 percent in the past year. I would avoid $PLTN at all costs. 

2021 was a terrible year for Palantir Technologies Inc. ($PLTR). The market correction got the worst of this data integration company as they nearly hit their IPO price from a little over a year ago. This came after they rose to a peak market cap of $68 billion (currently $28 billion). While Palantir is making great progress with their products as well as their balance sheet, their stock performance says otherwise. At the start of 2021 Palantir was worth $23.50 a share, grew to a high of roughly $35 a share in early February, and steadily fell to where it sits now at $14.47 a share. According to their current financials and expected growth, Palantir’s market cap should be worth upwards of $60 billion. This is a company you should expect to hear about a lot in the future as AI and data integration becomes more popular.

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