Tech Sell-Off: 2 Unstoppable Stocks to Buy Right Now

One of the most important skills an investor can possess is the ability to stay calm and think rationally before making decisions. This is especially important when you see red in your portfolio. During those situations, your gut reaction may be to sell and cut further losses. But if you've done the research and your investment thesis remains intact, it's often best to do nothing -- or even double down on your conviction.

For instance, shares of Teladoc Health (TDOC 0.30%) and Twilio (TWLO -0.55%) have dropped sharply in recent months, but the future still looks bright for both companies. Here's what you should know.

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Teladoc Health: The telemedicine leader

Teladoc is reimagining healthcare. Its virtual-first platform offers the most comprehensive range of services in the telemedicine industry, spanning from general wellness and prevention to acute and chronic care. In fact, its provider network includes 50,000 clinicians and covers over 450 sub-specialties.

Last year, Teladoc reinforced its advantage with the acquisition of Livongo Health, a company that specializes in the management of chronic conditions. Specifically, Livongo's platform leans on connected devices and data science to drive better outcomes in diabetes, hypertension, and weight management. Looking ahead, this merger should be a significant growth driver for Teladoc. In fact, management believes the resultant synergies (e.g. referrals, cross-sells) will drive $500 million in additional revenue by 2025.

That being said, Teladoc's top line is already growing quickly. And while the company is free-cash-flow negative over the trailing 12 months (due to the impact of the acquisition), Teladoc posted positive free cash flow of $69.8 million through the first three quarters of 2021, up 59% from the prior year.

Source: YCharts. TTM = trailing-12-months. CAGR = compound annual growth rate.

Last month, Teladoc rolled out Primary360 to employers and health plans. This is a virtual-first primary care service, and it will connect patients with dedicated physicians and clinical teams, making Teladoc a more integral part of its members' lives. Primary360 also creates cross-sell opportunities, as patients can be referred to other specialists or enrolled in chronic care programs.

So why is Teladoc stock down? Growth in U.S. paid members has decelerated sharply, rising just 2% in the most recent quarter. But this is hardly surprising after the pandemic supercharged growth last year. Moreover, there's another metric investors should consider: Teladoc has powered 10.6 million visits through the first nine months of 2021, up 39%. That uptick in user engagement underscores the value created for patients. Telemedicine is far more convenient (and less costly) than traditional solutions, and I think that fact will reaccelerate membership growth in time.

That's why this stock looks like a smart buy right now.

Twilio: The cloud communications leader

Twilio is a cloud communications company. Its platform interfaces with global telecom networks, allowing developers to embed features like messaging, voice, and video into their applications. Why does that matter? Building communications software has traditionally been a costly and time consuming process, requiring specialized hardware and numerous contracts with carriers around the globe.

Twilio eliminates that complexity, and that value proposition has helped it win clients like Airbnb, DoorDash, and Shopify. More importantly, the company has parlayed its first-mover's status into a significant competitive advantage. In fact, the International Data Corp. recently recognized Twilio as the industry leader, citing its broad portfolio, reputable brand name, and strong growth strategy as key differentiators.

Not surprisingly, that advantage has translated into strong sales growth.

Source: YCharts. TTM = trailing-12-months. CAGR = compound annual growth rate.

Twilio recently delivered solid third-quarter results, growing revenue 65% to $740 million. However, the company generated negative free cash flow through the first nine months of the year, and its fourth-quarter guidance fell short of Wall Street's expectations. That sent the stock tumbling, and shares of Twilio currently trade 29% below their 52-week high.

All things considered, I think that's an overreaction. Twilio is the clear leader in a market that management values at $87 billion by 2023. Moreover, the company continues to expand its portfolio of pre-built solutions. Most recently, it launched Twilio Engage, a marketing platform that pulls data from Segment (a company acquired by Twilio in 2020) to create, measure, and optimize personalized campaigns.

Together with Twilio Flex (customer service) and Twilio Frontline (sales), Twilio can now power engagement across the entire customer lifecycle. That should be a significant growth driver, especially as more enterprises look to build out their digital presence. And given the recent sell-off, now looks like a good time to buy a few shares of this growth stock.