3 Growth Stocks to Buy to Recession-Proof Your Portfolio
In times of economic uncertainty, it can be wise to invest in recession-proof growth stocks that have the ability to withstand downturns and offer financial stability. Ensuring a portfolio is both robust and has growth potential is crucial. This piece spotlights three exceptional growth stocks that possess these attributes, effectively safeguarding against any potential economic setbacks.
These entities exhibit remarkable performance in terms of their strong foundations, varied sources of revenue, and significant market presence. Their outstanding characteristics make them ideal stocks for steady expansion in the face of economic recessions, presenting stability and growth prospects. Whether you possess prior experience in investment or are a novice, these leading stocks for growth could act as a financial buffer, providing protection during times of economic decline. We invite you to delve deeper into these robust market competitors and understand the rationale behind their inclusion in your investment tactics.
Here are three of the best recession-proof growth stocks that I think are worth holding, despite concerns around an impending recession.
Nvidia (NVDA)
Nvidia’s (NASDAQ:NVDA) stock surged impressively in 2023, surpassing a $700 billion market cap, making it the fifth-largest US company. However, this rise seems unjustified. The company’s latest earnings report showed a steep drop in sales and earnings per share due to declining demand for video cards and price cuts.
AI is a buzzword in 2023, but Nvidia’s graphics cards, its main product, remain significant. It’s unwise to short-sell NVDA stock. Nvidia leads in GPU technology, having broken the 3800 MHz barrier and set to release the potent RTX 4060 Ti graphics card with 16 GB of VRAM and a 165W TDP in July. Such graphics card innovations make Nvidia a power player.
Invest in Nvidia not just for traditional valuation metrics, but for its potential leadership in next-gen GPU and AI hardware. Nvidia shines in these areas. You might consider the stock overpriced right now, so there’s no rush to buy. Yet, expect possible upward momentum. Strong companies, like Nvidia, often yield solid long-term returns.
Apple (AAPL)
The stability of Apple (NASDAQ:AAPL) makes it a desirable option for traders looking for a defensive investment amid tumultuous financial circumstances. With its strong consumer brand, pricing power, and indispensable core product, Apple remains resilient irrespective of broader economic conditions. This is why it’s also a strong pick among our recession-proof growth stocks.
Apple’s strong brand enables it to set high prices, and it shows consistent financial growth. A $1,000 investment in Apple a decade ago could have netted $12,501.62 today, reflecting an annual return of 28.7%. If invested five years ago, the same amount could have grown to $3,960.5, a 31.57% return. Even amid economic challenges, a $1,000 investment made last year would have earned a 10.8% gain, thus making it one of those top growth stocks to buy.
Additionally, rising iPhone sales significantly enhanced Apple’s Q1 revenue. While the U.S. economic downturn impacted iPhone sales in the Americas, the company’s global brand recognition has helped mitigate the decline in its domestic market. Apple boasts a strong and stable business that is poised to maintain a positive outlook for the foreseeable future, which may help you recession-proof your portfolio.
Meta Platforms (META)
Have you explored the investment potential of Meta Platforms (NASDAQ:META) as one of the top growth stocks in the artificial intelligence sector? Meta Platforms show promising signs of making significant strides in the machine-learning market. While investing in the company is optional at this stage, keep an eye on how AI advancements drive Meta’s growth and transformation as a prominent tech powerhouse in the coming year.
META stock offers an intriguing AI proposition that you shouldn’t overlook. Meta Platforms has introduced its “AI Sandbox,” allowing select advertisers to experiment with advanced AI tools. The company plans to expand access to this suite of tools, beginning in July. Keep an eye out for embedded ads on Meta Platforms’ Facebook and Instagram apps, leveraging generative AI technology. These ads have the potential to be more personalized and dynamic, featuring responsive text and images that deliver a smarter advertising experience.
Investing in recession-proof stocks often requires discipline. In this case, investors should patiently wait for the right time to buy Meta shares. Despite potential short-term fluctuations, Meta’s focus on cost reductions and profit generation sets the stage for long-term growth. Positive sentiment on Wall Street adds to the stock’s appeal and potential upside.
On the date of publication, Chris MacDonald has a position in AAPL, META. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
