August is the thick of the second-quarter earnings season. This year is particularly suspenseful as companies match up against the second quarter of 2020, where some of them got a huge pandemic boost, and others got a huge pandemic bashing. Many companies have bounced back big, topping 2019 numbers, and others have demonstrated lackluster growth in the face of tough comparisons.

Investors have rewarded stocks accordingly. They sent Home Depot stock down this week after it posted weak comps after a huge surge last year, and they rewarded Coca-Cola in July after it posted a 42% revenue rise.

But things are not quite that simple, and investors should focus on the long-term outlook when evaluating a stock. That's why I'm going with Airbnb (ABNB 2.43%), Walt Disney (DIS 1.09%), and Upstart Holdings (UPST 0.82%) as hot stocks to buy this month. All three posted incredible growth in the second quarter, and they all have enormous upside.

A person pulling a suitcase and walking up to an Airbnb residence.

Image source: Airbnb.

Travel is back, and Airbnb is leading the way

Airbnb already demonstrated signs of a comeback in the first quarter of 2021, with a 5% revenue increase after staggering declines in 2020. But the second quarter was just monstrous, with revenue increasing 299% and gross booking value increasing 320% year over year.

That's way better than a simple pandemic comparison. And all the reasons it made such a fierce recovery are the same ones why it has so much potential to stay ahead of traditional travel and widen its lead. Most of those reasons flow from the same source: its adaptive and flexible model. That means that as travel shifts, Airbnb shifts along with it. 

As signs of recovery come into view, that became visible in a few ways. One was an increase in stays of a month or more. More people are using Airbnb rentals as a home rather than a vacation, which isn't nearly as feasible in traditional travel accommodations. Another is customers branching out into off-the-beaten-path destinations. That's also more challenging with standard hotels, which you can't always find in far-flung locations.

One way to see Airbnb's strength is how it turns it's nights booked into revenue. Nights booked increased 197% in Q2 year over year, and they decreased 1% from 2019. But Airbnb's revenue skyrocketed past that number. That means it's making more money from its bookings, and it demonstrates resilience. It's also turning more of that revenue into profit, as net loss contracted from over $576 million in Q2 2020, and more than $1 billion in Q1 2021, to $68 million in Q2 2021. 

Despite what seemed like a breakout quarter, investors snubbed the travel company. That might be because it's already somewhat expensive, trading at almost 20 times sales. But that's typical for a growth company, and it shouldn't stop you from taking a position.

Disney's back in action

Disney, on the other hand, is a perpetual crowd pleaser, both in its parks and in the markets. And it came through big in the third quarter, growing revenue 45%. That reversed the 42% decline in Q3 2020, despite parks functioning at limited capacity and other experiences still not running at all. All told, third-quarter sales came in just 16% below the same period of 2019, before the start of the coronavirus pandemic

Parks revenue rebounded with a more than 300% increase in Q3, or about two-thirds of the 2019 metric, and it accounted for about a quarter of the company's total sales. Media and entertainment distribution, the newly structured content-based segment, increased 18%. Streaming remained the most aggressive revenue driver in Q3, reaching almost 174 million accounts for Disney+, Hulu, and ESPN+ and topping estimates. 

The compelling story for Disney stock comes from all of its businesses combined. There simply isn't another media company on the global scene that combines best-in-class parks and resorts with an unrivaled film library. CEO Bob Chapek has promised lots of new content, including Marvel and Star Wars series that are likely to be big winners and drive membership.

Disney stock is down 3% year to date as of this writing, but there's so much upside to unlock for the top stock in the entertainment sector.

Four people sit at a table looking at paperwork.

Image source: Getty Images.

Artificial intelligence for banking

Despite a slow initial public offering in December, Upstart exploded into one of the hottest stocks on the market, gaining 420% year to date. Investors finally caught onto the company's vast potential offering an artificial intelligence platform for small banking clients.

Upstart's platform evaluates customer creditworthiness based on thousands of data points for an accurate risk assessment. This results in more approvals, putting more money in the client bank's coffers with less risk involved, a true win-win.

"Our second-quarter results continue to show why Upstart has the potential to be among the world's largest and most impactful fintechs," Upstart CEO Dave Girouard said in the company's Q2 earnings release. That confidence is warranted when you see what kind of growth Upstart is experiencing.

In the second quarter, revenue increased more than 1,000%, and loans originated increased more than 1,600%. It moved to a profit from a loss last year, and it expects similarly spectacular results in the third quarter. 

The only problem with Upstart stock is how expensive the stock has become over the past few months. It now trades at nearly 300 times trailing-12-month earnings. That's a hefty premium. Keep in mind, though, many of today's greatest all-time gainers have traded at such a premium at one time or another. So while it may take time for the stocks to catch up to this pricy valuation, the way things are going and look to be continuing, you'll still have a lot of bang for your buck.