Nasdaq Bear Market: 3 Breakthrough Stocks That Can Triple Your Money By 2027
There is no doubt that this has been one of the toughest years on record for Wall Street and investors. Since hitting all-time closing highs in the past eight months, the timeless Dow Jones Industrial Averagethe reference S&P500and dependent on technology Nasdaq Compound (^IXIC 0.00%) lost up to 19%, 24% and 34% of their value, respectively. In fact, it was the worst first half of a new year for the S&P 500 since 1970.
In one respect, bear market declines like the ones we’re seeing in the S&P 500 and Nasdaq can be frightening. The speed of bearish moves can be unpredictable and weigh on an investor’s resolve. But history also shows that bear market declines are the perfect opportunity for patient investors to pounce. That’s because every double-digit percentage decline in history (including in the Nasdaq Composite) has eventually been erased by a bull market rally.
This is a particularly intriguing time to go bargain-hunting among innovative growth stocks. While it can be difficult to look past short-term weakness and/or fast-moving business struggles during a bear market, there are some real game changers that have the potential to make investors long. much richer term.
Below are three game-changing stocks you can buy with confidence during the Nasdaq bear market that can triple your money by 2027.
The first game-changing action that has all the tools and intangibles needed to triple your money in the next five years is the cloud-based lending platform Assets received (UPST 8.39%).
For some investors, Upstart might look like a stock to avoid right now. Just two weeks ago, the company announced preliminary second-quarter operating results, noting that it would significantly miss its earlier revenue and net loss guidance. According to the company, fears of inflation and recession are driving up interest rates and prompting lending institutions to be more cautious. This is obviously not good news, at least in the short term, for a company whose goal is to control loans.
However, Upstart’s operating model brings a wealth of competitive advantages and intriguing growth opportunities that should enable it to sustain a superior growth rate over the next five years, if not well beyond.
For example, Upstart relies on artificial intelligence (AI) to verify loans. While the traditional verification process can take weeks and be quite expensive, around three quarters of all Upstart loans are fully automated and approved. This saves applicants time and, more importantly, saves financial institutions money.
To build on this, Upstart’s AI-powered lending platform has opened the door to a wider cross section of the population. Relying on AI instead of traditional verification measures has allowed people with lower credit scores to be approved for loans. But even though Upstart approvals have lower average credit scores than the traditional verification process, delinquency rates have been similar. In other words, Upstart’s loan pool provides financial institutions with a larger addressable market without increasing their risk.
Additionally, Upstart is branching out into new lending channels that offer more opportunities. Following the company’s acquisition of Prodigy Software in 2021, Upstart can now offer AI-powered auto loans. The auto loan origination market is nearly seven times the size of personal loans, and that’s where he’s focused most of his attention so far. With a $6 trillion addressable lending market, which includes mortgages and small business loans, Upstart’s cap seems sky-high.
A second game-changing stock that can be bought with confidence during the Nasdaq bear market and can triple your money over the next five years is the furniture maker. The Lovesac company (TO LIKE 1.21%).
Normally the phrase “furniture stock” is used to put someone to sleep. Furniture companies are typically brick-and-mortar operators that rely on the same small group of wholesalers for their products. What makes Lovesac so interesting is that he seeks to disrupt this heavy industry in various ways.
It all starts with Lovesac products. While the company was originally known for selling ottoman-style chairs known as bags, almost 88% of its revenue these days comes from the sale of its “sactionals”. They are modular sectional sofas that can be rearranged dozens of ways to fit most living spaces.
In addition to offering functionalities, the sactionnels are differentiated according to the options available. Shoppers have over 200 different covers to choose from, ensuring sactionals can match the color or theme of any living space. And they can be upgraded with wireless charging and/or surround sound systems.
Finally, the yarn used in the action blankets is made entirely from recycled plastic water bottles. This makes Lovesac’s products incredibly eco-friendly, which is probably why precocious millennials are the company’s main customers.
Beyond its products, Lovesac uses its omnichannel sales platform to stand out. For example, the company was able to shift about half of its sales online during the pandemic. Having a significant direct-to-consumer presence, as well as relying on pop-up showrooms and online partnerships, helps reduce company overhead and increase operating margins.
In short, this furniture stock offers sustainable revenue and profit growth of 15% to 20% per year.
A third game-changing stock that can be bought in spades during the Nasdaq bear market and triple your money by 2027 is the China-based electric vehicle (EV) maker Nio (NIO -3.07%).
Like virtually all auto stocks, Nio has faced a hurricane of headwinds over the past two quarters. The pandemic and Russia’s invasion of Ukraine have led to shortages of semiconductors and auto parts in general. In addition, historically high inflation weighed on automakers’ margins.
The good news is that Nio seems to be turning the corner despite these headwinds. In June, the company delivered an all-time high of 12,961 electric vehicles. Even with reduced production in April and May, the automaker still made more than 25,000 deliveries in the second quarter. If supply chain challenges can be resolved relatively quickly, the company should have no problem reaching 50,000 EV deliveries per month within 12 months.
Besides the high demand for electric vehicles, Nio’s innovation is what’s really impressive. In June, the company unveiled the ES7, a midsize five-seat SUV that will sneak in at a more affordable price point than its ES8. It also began deliveries of the ET7 sedan in March and will begin deliveries of the ET5 sedan in September. With the higher battery upgrade, the ET7 and ET5 provide superior battery life compared to You’re hereflagship sedans.
Another innovation of note is Nio’s battery-as-a-service (BaaS) subscription model, which was introduced in August 2020. With BaaS, EV buyers get a discount off the original purchase price of their vehicle and can charge, swap or upgrade their batteries in the future. In return, Nio receives high-margin monthly subscription fees and retains early buyers to the brand.
Because China is the largest automotive market in the world and its electric vehicle industry is still nascent, Nio has an incredible opportunity to gobble up market share and become an industry leader. By 2027, it should be swimming in annual profits.