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Deep Dive: After a dazzling 2021, Apple and Tesla stocks are expected to be duds in 2022

A report from Goldman Sachs shows how much of investors’ money is concentrated in only five high-flying stocks. And a screen of the biggest contributors to this year’s excellent performance for the S&P 500 index highlights two that are expected not to perform well in 2022: Apple and Tesla.

Just five stocks — Microsoft Corp.
MSFT,
+0.57%
,
Alphabet Inc.
GOOGL,
-0.44%
,
Apple Inc.
AAPL,
+0.03%
,
Nvidia Corp.
NVDA,
+1.97%

and Tesla Inc.
TSLA,
-1.19%

— contributed over a third of the S&P 500 Index’s
SPX,
-0.08%

26% total return for 2021 through Dec. 9, according to analysts at Goldman. And from the end of April through Dec. 9, they contributed 51% of the index’s 13% return.

Moreover, only 25 stocks accounted for 58% of the index’s gains, including reinvested dividends, through Dec. 9, Goldman said. Its list of those stocks is below, along with screens of Wall Street analysts’ expectations for the group as we look ahead to 2022 and 2023.

The analysts, led by David Kostin, pointed out that “market breadth has narrowed substantially” over the past several months. In other words, investors have concentrated more of their money (and risk) in the largest tech companies, by market capitalization.

That said, the Goldman analysts continue to recommend that long-term investors “own high-growth, high-margin stocks.”

Digging into the 25 biggest contributors to the S&P 500’s returns this year

This list shows each of the 25 stocks and their “contributions” to the gains, expressed in basis points. (A basis point is one 100th of a percent. ) The table also includes pricing information — closing prices as of Dec. 14 with declines from 52-week highs and the dates of those highs.

Company

Ticker

Total return – 2021 through Dec. 9

Contribution to S&P 500’s return for 2021 through Dec. 9 (basis points)

Closing Price – 12/14/21

Decline from 52-week high

Date of 52-week high

Microsoft Corp.

MSFT,
+0.57%

51%

271

$328.34

-6.1%

11/22/2021

Alphabet Inc. Class A

GOOGL,
-0.44%

68%

224

$2,878.14

-4.7%

11/19/2021

Apple Inc.

AAPL,
+0.03%

32%

217

$174.33

-4.3%

12/13/2021

Nvidia Corp.

NVDA,
+1.97%

134%

137

$283.37

-18.2%

11/22/2021

Tesla Inc.

TSLA,
-1.19%

42%

71

$958.51

-22.9%

11/04/2021

Home Depot Inc.

HD,
+0.29%

58%

52

$402.20

-4.4%

12/06/2021

Meta Platforms Inc. Class A

FB,
-1.82%

21%

43

$333.74

-13.2%

09/01/2021

UnitedHealth Group Inc.

UNH,
+0.81%

37%

39

$479.46

-0.7%

12/14/2021

Bank of America Corp

BAC,
-0.79%

50%

36

$44.13

-9.4%

11/03/2021

JPMorgan Chase & Co.

JPM,
-0.82%

29%

36

$159.13

-8.0%

10/25/2021

Exxon Mobil Corp.

XOM,
-2.03%

61%

34

$61.54

-7.3%

11/08/2021

Berkshire Hathaway Inc. Class B

BRK.B,
+0.18%

23%

32

$295.03

-0.5%

12/14/2021

Amazon.com Inc.

AMZN,
-1.30%

7%

31

$3,381.83

-10.4%

07/13/2021

Pfizer Inc.

PFE,
+3.48%

47%

30

$55.54

-0.7%

12/14/2021

Wells Fargo & Co.

WFC,
-1.02%

67%

26

$48.89

-7.0%

11/03/2021

Chevron Corp.

CVX,
-1.71%

47%

24

$116.22

-2.5%

12/08/2021

Intuit Inc.

INTU,
+0.07%

76%

24

$639.48

-10.8%

11/19/2021

Lowe’s Companies Inc.

LOW,
+0.91%

63%

23

$252.46

-4.1%

12/13/2021

Accenture Plc Class A

ACN,
+0.39%

44%

23

$369.73

-3.0%

12/13/2021

Thermo Fisher Scientific Inc.

TMO,
+1.74%

37%

22

$632.11

-5.2%

11/26/2021

Costco Wholesale Corp.

COST,
+0.79%

40%

21

$545.34

-2.8%

12/10/2021

Broadcom Inc.

AVGO,
+0.76%

36%

20

$614.91

-4.6%

12/10/2021

Adobe Inc.

ADBE,
+0.61%

26%

20

$614.86

-12.1%

11/22/2021

Danaher Corp.

DHR,
+1.32%

44%

20

$307.70

-7.9%

09/10/2021

Eli Lilly and Co.

LLY,
+8.20%

46%

19

$249.38

-9.6%

08/17/2021

Sources: Goldman Sachs, FactSet

We included the declines from 52-week highs through Dec. 14 to illustrate how volatile the stocks of rapidly growing tech giants can be. Shares of Nvidia, for example, were down 18% from the high reached Nov. 22. Tesla has tumbled into bear-market territory three times in 2021 and is down 23% from its high reached Nov. 4.

You can click the tickers for more about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.

Screening the 25 stocks: sales, earnings and ratings

Leaving the list in the same order, here are consensus estimates among analysts polled by FactSet for sales (in millions of dollars) for calendar years through 2023, with projected compound annual growth rates (CAGR):

Company

Ticker

Estimated revenue – 2021

Estimated revenue – 2022

Estimated revenue – 2023

Two-year estimated sales CAGR

Microsoft Corp.

MSFT,
+0.57%

$182,593

$210,753

$240,396

14.7%

Alphabet Inc. Class A

GOOGL,
-0.44%

$254,060

$296,677

$341,671

16.0%

Apple Inc.

AAPL,
+0.03%

$369,729

$389,037

$413,789

5.8%

Nvidia Corp.

NVDA,
+1.97%

$25,754

$31,175

$36,380

18.9%

Tesla Inc.

TSLA,
-1.19%

$51,678

$73,183

$89,639

31.7%

Home Depot Inc.

HD,
+0.29%

$148,615

$153,285

$158,252

3.2%

Meta Platforms Inc. Class A

FB,
-1.82%

$117,569

$139,805

$164,737

18.4%

UnitedHealth Group Inc.

UNH,
+0.81%

$286,410

$316,412

$342,740

9.4%

Bank of America Corp

BAC,
-0.79%

$89,268

$93,591

$99,180

5.4%

JPMorgan Chase & Co.

JPM,
-0.82%

$123,128

$123,405

$130,270

2.9%

Exxon Mobil Corp.

XOM,
-2.03%

$294,130

$308,304

$292,830

-0.2%

Berkshire Hathaway Inc. Class B

BRK.B,
+0.18%

$294,667

$294,894

$309,287

2.5%

Amazon.com Inc.

AMZN,
-1.30%

$470,607

$553,097

$649,246

17.5%

Pfizer Inc.

PFE,
+3.48%

$81,333

$92,070

$72,748

-5.4%

Wells Fargo & Co.

WFC,
-1.02%

$76,024

$72,048

$75,462

-0.4%

Chevron Corp.

CVX,
-1.71%

$155,748

$168,114

$159,898

1.3%

Intuit Inc.

INTU,
+0.07%

$10,714

$12,980

$14,881

17.9%

Lowe’s Companies Inc.

LOW,
+0.91%

$95,152

$97,459

$100,080

2.6%

Accenture Plc Class A

ACN,
+0.39%

$52,819

$58,906

$63,622

9.8%

Thermo Fisher Scientific Inc.

TMO,
+1.74%

$37,210

$39,493

$42,053

6.3%

Costco Wholesale Corp.

COST,
+0.79%

$203,027

$222,877

$238,794

8.5%

Broadcom Inc.

AVGO,
+0.76%

$27,976

$30,877

$32,521

7.8%

Adobe Inc.

ADBE,
+0.61%

$15,957

$18,393

$21,000

14.7%

Danaher Corp.

DHR,
+1.32%

$29,116

$30,792

$32,437

5.5%

Eli Lilly and Co.

LLY,
+8.20%

$27,601

$27,774

$30,366

4.9%

Source: FactSet

Here’s another look ahead, this time at earnings-per-share estimates

Company

Ticker

Estimated EPS – 2021

Estimated EPS – 2022

Estimated EPS – 2023

Two-year estimated EPS CAGR

Microsoft Corp.

MSFT,
+0.57%

$8.60

$9.85

$11.44

15.3%

Alphabet Inc. Class A

GOOGL,
-0.44%

$108.65

$113.97

$130.48

9.6%

Apple Inc.

AAPL,
+0.03%

$5.64

$5.85

$6.27

5.4%

Nvidia Corp.

NVDA,
+1.97%

$4.18

$5.08

$6.15

21.3%

Tesla Inc.

TSLA,
-1.19%

$5.99

$8.64

$11.46

38.3%

Home Depot Inc.

HD,
+0.29%

$15.17

$16.13

$17.30

6.8%

Meta Platforms Inc. Class A

FB,
-1.82%

$13.94

$14.24

$16.94

10.3%

UnitedHealth Group Inc.

UNH,
+0.81%

$18.84

$21.63

$24.58

14.2%

Bank of America Corp

BAC,
-0.79%

$3.52

$3.19

$3.63

1.5%

JPMorgan Chase & Co.

JPM,
-0.82%

$14.98

$12.03

$13.23

-6.0%

Exxon Mobil Corp.

XOM,
-2.03%

$5.03

$5.79

$5.59

5.4%

Berkshire Hathaway Inc. Class B

BRK.B,
+0.18%

$11.65

$12.63

$14.13

10.1%

Amazon.com Inc.

AMZN,
-1.30%

$41.31

$51.54

$76.68

36.2%

Pfizer Inc.

PFE,
+3.48%

$4.19

$5.75

$4.87

7.8%

Wells Fargo & Co.

WFC,
-1.02%

$4.63

$3.72

$4.41

-2.4%

Chevron Corp.

CVX,
-1.71%

$8.36

$9.42

$8.78

2.5%

Intuit Inc.

INTU,
+0.07%

$10.56

$12.51

$14.70

18.0%

Lowe’s Companies Inc.

LOW,
+0.91%

$11.71

$12.86

$14.40

10.9%

Accenture Plc Class A

ACN,
+0.39%

$9.25

$10.48

$11.59

11.9%

Thermo Fisher Scientific Inc.

TMO,
+1.74%

$23.45

$21.17

$23.34

-0.2%

Costco Wholesale Corp.

COST,
+0.79%

$11.63

$13.06

$14.33

11.0%

Broadcom Inc.

AVGO,
+0.76%

$28.83

$33.53

$36.69

12.8%

Adobe Inc.

ADBE,
+0.61%

$12.63

$14.47

$16.88

15.6%

Danaher Corp.

DHR,
+1.32%

$9.82

$10.16

$10.72

4.5%

Eli Lilly and Co.

LLY,
+8.20%

$8.02

$8.13

$9.71

10.1%

Source: FactSet

Here’s a summary of Wall Street analysts’ opinions about the stocks:

Company

Ticker

Share “buy” ratings

Share neutral ratings

Share “sell” ratings

Closing price – 12/14/21

Consensus price target

Implied 12-month upside potential

Microsoft Corp.

MSFT,
+0.57%

90%

10%

0%

$328.34

$366.41

12%

Alphabet Inc. Class A

GOOGL,
-0.44%

94%

6%

0%

$2,878.14

$3,333.70

16%

Apple Inc.

AAPL,
+0.03%

79%

19%

2%

$174.33

$174.35

0%

Nvidia Corp.

NVDA,
+1.97%

81%

12%

7%

$283.37

$341.51

21%

Tesla Inc.

TSLA,
-1.19%

43%

30%

28%

$958.51

$860.35

-10%

Home Depot Inc.

HD,
+0.29%

65%

32%

3%

$402.20

$417.16

4%

Meta Platforms Inc. Class A

FB,
-1.82%

76%

22%

2%

$333.74

$398.32

19%

UnitedHealth Group Inc.

UNH,
+0.81%

85%

11%

4%

$479.46

$490.88

2%

Bank of America Corp

BAC,
-0.79%

64%

25%

11%

$44.13

$49.83

13%

JPMorgan Chase & Co.

JPM,
-0.82%

61%

32%

7%

$159.13

$179.70

13%

Exxon Mobil Corp.

XOM,
-2.03%

39%

51%

10%

$61.54

$72.97

19%

Berkshire Hathaway Inc. Class B

BRK.B,
+0.18%

43%

57%

0%

$295.03

$332.50

13%

Amazon.com Inc.

AMZN,
-1.30%

94%

6%

0%

$3,381.83

$4,102.98

21%

Pfizer Inc.

PFE,
+3.48%

38%

58%

4%

$55.54

$53.67

-3%

Wells Fargo & Co.

WFC,
-1.02%

67%

33%

0%

$48.89

$54.90

12%

Chevron Corp.

CVX,
-1.71%

68%

32%

0%

$116.22

$130.36

12%

Intuit Inc.

INTU,
+0.07%

83%

13%

4%

$639.48

$756.29

18%

Lowe’s Companies Inc.

LOW,
+0.91%

73%

24%

3%

$252.46

$272.43

8%

Accenture Plc Class A

ACN,
+0.39%

70%

26%

4%

$369.73

$383.68

4%

Thermo Fisher Scientific Inc.

TMO,
+1.74%

83%

13%

4%

$632.11

$682.47

8%

Costco Wholesale Corp.

COST,
+0.79%

59%

35%

6%

$545.34

$551.75

1%

Broadcom Inc.

AVGO,
+0.76%

84%

13%

3%

$614.91

$682.70

11%

Adobe Inc.

ADBE,
+0.61%

81%

19%

0%

$614.86

$720.69

17%

Danaher Corp.

DHR,
+1.32%

82%

14%

4%

$307.70

$350.29

14%

Eli Lilly and Co.

LLY,
+8.20%

67%

28%

5%

$249.38

$279.72

12%

Source: FactSet

Here are six data highlights to consider:

Two of this year’s best performers are expected to be poor performers next year, based on the price targets: Apple and Tesla.

Apple is expected to show much slower sales and earnings growth than the rest of the top five companies on the list through 2023.

Tesla’s expected two-year sales CAGR of 31.7% is by far the highest on the list. But only 43% of analysts polled by FactSet rate the stock a “buy.”

Tesla also has the highest expected EPS CAGR through 2023 at 38.3%, but Amazon.com Inc.
AMZN,
-1.30%

is right behind, with a projected EPS CAGR of 36.2%. Next on the list by this measure is Nvidia, at 21.3%.

From the price targets, Nvidia and Amazon are Wall Street analysts’ favorite stocks on the list, with implied 12-month upside of 21%.

Pfizer Inc.’s
PFE,
+3.48%

sales are expected to rise in 2022 but fall in 2023 to a level below that of 2021, according to analysts polled by FactSet. That could reflect expectations that the coronavirus pandemic will be ending.

Don’t miss: These are Wall Street’s 25 favorite semiconductor stocks for 2022

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