Hydrogen, chips and more: Fund managers and analysts name their top stocks for 2022

Published Wed, Dec 22 202110:30 PM EST

There are investment opportunities across a broad range of sectors in 2022, from semiconductors to batteries, hydrogen and beyond — that's according to fund managers and analysts who shared their top picks for the coming year. Mark Peden, co-manager of the Aegon Global Equity Income Fund, told CNBC via email that U.S. semiconductor company Broadcom was one his top picks for 2022. He said that Broadcom's strength in networking and wireless infrastructure meant it would benefit from the growing need for more reliable networks, to support technology such as self-driving cars and cloud computing. He said Broadcom also generates "enormous amounts of cash;" it recently announced that it plans to return $10 billion to shareholders via a share buyback scheme and around $7 billion via dividends. Peden also likes U.S. industrial gas supplier Air Products , which he described as a "global leader" in green hydrogen. Last year, Air Products signed up to work on the world's largest carbon-free hydrogen project . "Once up and running, the project should avoid over 3 million tons of CO2 from entering our atmosphere every year; the equivalent of taking 700,000 cars off the road," Peden said. Air Products' stock also offers a dividend yield of 2.2%, he added, which the company has grown for 39 consecutive years. French electrical equipment group Schneider Electric was another stock on Peden's 2022 list. "It is helping to lead the digital transformation of energy management and automation in homes, buildings, data centres, infrastructure and industries," he said. By 2025, the majority of Schneider's revenues would be directly affected by technology like the "Internet of Things," Peden added, with the company forecasting revenue growth of as much as 8% in the next four years. Recycling EV batteries Amanda O'Toole, portfolio manager at AXA Investment Managers, told CNBC that she was backing lithium-ion battery recycling company Li-Cycle Holdings in 2022. She explained that EV batteries contain materials which are difficult to dispose of at the end of a vehicle's life. "As the fleet of EVs grows and ages, that is going to become an increasingly pressing concern," she said, putting Li-Cycle in a position to benefit as the largest lithium-ion battery recycler in North America. O'Toole isn't the only one focused on battery cycling. Bernstein's Zhihan Ma also recently highlighted the segment as one to watch, and named a raft of stocks set to benefit . "Although the market for a 'second life' for EV batteries has not yet reached scale, the 10 million EVs on the road today will reach their end of life and enter the reuse/recycling market by 2040, which could create greater economies of scale for second-life applications," Ma added. Blockbuster performance Looking ahead to 2022, GlobalData assessed tech stocks across a number of different themes — "we define a theme as any issue that keeps a senior executive awake at night," the analysts, led by Cyrus Mewawalla, wrote in December. U.S. chip designer Nvidia was one of the highest scoring stocks across many of the themes shaping the semiconductor industry, the analytics firm said, indicating that the company will continue to perform well in the coming year. Speaking to CNBC in December, Mewawalla said that he believed the revenues of cloud-based technology companies, such as Nvidia and Microsoft , would "continue to rise because CEOs know they need to tech-enable their businesses after this pandemic." Nvidia has already seen blockbuster performance, up around 150% in 2021 and 250% over the last 5 years, and GlobalData expects it to remain a market leader across a number of segments "given the applicability of its GPUs [graphics processing unit]." However, they also noted that a growing theme for 2022 and beyond would be technology giants, like Apple and Amazon , increasingly bringing more aspects of chip development in-house. Chinese tech giant Tencent , meanwhile, ranked highest in GlobalData's ranking of gaming stocks. According to GlobalData forecasts, the global video games market will be worth $223 billion in 2022, up from $173 million in 2020. Despite increasing regulation in China around gaming, GlobalData analysts said Tencent was one of the companies that was "well-positioned to dominate the growing domestic cloud gaming market."

A Broadcom chip in an Apple iPhone.

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