Tech Sell-Off: 2 Growth Stocks to Buy for the Long Run

There's one surefire method to overcoming short-term jitters in the stock market. It has been used for decades among the world's most successful investors, including the Oracle of Omaha, Warren Buffett, and it's incredibly simple. 

The method? Invest for the long term. 

Past experience has shown that a falling market is the best time to buy shares in U.S. companies because, in the long run, the broader market has always recovered. An index fund can be a great way to execute this strategy, but if you're interested in buying individual stocks, it can be helpful to focus on high-growth companies operating in the industries of the future. 

Here are two stocks to get you started during the current tech sell-off.

Image source: Getty Images.

The case for Tesla

When it comes to electric vehicles (EVs), Tesla Motors (TSLA 15.31%) has become the most identifiable brand in the industry. It's the leader in technology and sales, and the company has even drawn praise from the CEO of car manufacturing giant Volkswagen Group for its innovative production processes. 

In 2021, Tesla delivered over 936,000 vehicles, which was an 87% jump from 2020. That highlights how rapidly demand is rising for EVs, and the company is quickly growing alongside the industry with the recent addition of two gigafactories in Texas and Germany. 

Tesla has managed to build EVs profitably, which is something many detractors thought it wouldn't achieve. In fact, its automotive gross profit margin expanded to 29.3% in 2021, and it'll likely improve as the company continues to build scale. And the gross profit margin is flowing through to the bottom line, with earnings per share growing 666% to $4.90 last year. For context, key competitor Ford Motor Company most recently had a gross margin of just 15.9%. 

But Tesla is more than just a carmaker. Its residential solar roof deployments grew 68% in 2021, and battery storage deployments were up 32%. These will likely feature as important pieces of the Tesla story as the technology becomes cheaper and more accessible for consumers. 

EVs are on track to dominate the car industry, with one estimate suggesting they could account for 60% of total vehicle sales by 2050. But with global governments fast-tracking green energy initiatives, that could happen even more quickly. Therefore, buying the top company in the business might be the way to go, especially with its stock currently trading down about 25% from its all-time high. 

Image source: Getty Images.

The case for Uber Technologies

Investors might be familiar with the concept of the gig economy, where tech platforms connect consumers with workers providing various services. Uber Technologies (UBER -2.39%) is one of the strongest drivers of this phenomenon, offering a way for people to work independently in mobility, food delivery, and freight delivery services. 

As with any new and disruptive technology, Uber has faced challenges. Lawmakers around the world have raised concerns about the company treating its workers as contractors, which deprives them of benefits, and the United Kingdom has even forced Uber to begin classifying them as employees. 

But the company has shown resilience by turning in a strong financial performance during 2021, with analysts expecting 2022 to be even better. 

Data source: Uber Technologies, Yahoo! Finance. CAGR = Compound Annual Growth Rate.

Uber has historically been a loss-making company, but in the fourth quarter of 2021, it managed to turn a profit of $0.46 per share. The next step is to deliver positive earnings on a yearly basis, and while analysts don't expect it to happen in 2022, the company appears to be inching closer to the mark.

Uber stock has declined 46% from its all-time high amid the tech sell-off, and it now trades at a price-to-sales multiple of 3.6 based on 2021 revenue. Its key competitor in the food delivery business, DoorDash, trades at a multiple of 7.8 -- more than double that of Uber -- despite DoorDash having a less diverse business and less than a third of the annual revenue.

Given Uber's financial strength, especially the fact its up-and-coming freight segment grew 245% in Q4 2021, there's a legitimate argument to be made that Uber stock should be trading significantly higher. That, combined with the ongoing expansion of the gig economy, makes Uber stock a great buy for the long run.