High inflation is causing consumers to tighten their belts this year, with staples like gas setting all-time highs on a price-per-gallon basis. It has prompted the Federal Reserve to take aggressive action, raising the benchmark interest rate by 50 basis points in May, which is double the typical 25-basis-point increase, in an attempt to cool prices. Higher rates have wreaked havoc on high-flying stocks in the technology sector, plunging the Nasdaq-100 index into a bear market as investors rein in their growth expectations.

While the short-term volatility is unsettling, it's important to focus on the long run when investing. History is proof that bear markets don't last forever, so now could be a great time to put money to work in heavily discounted stocks. A panel of three Motley Fool contributors have identified Fiserv (FI 0.88%), The Trade Desk (TTD -5.58%), and Airbnb (ABNB -8.66%) as potential leaders when the tech sector's resurgence eventually happens. Here's why.

A barista accepting a card payment at a cafe.

Image source: Getty Images.

A silent achiever

Anthony Di Pizio (Fiserv): Fiserv doesn't attract a great deal of attention, but the $63 billion giant is a dominant player in the payments industry. It doesn't serve individual consumers directly, yet it has touch points with over 1 billion of them. The company provides financial technology solutions to merchants and financial institutions to help them accept and process payments and power their digital customer experiences. 

Fiserv has built a client base of over 10,000 banks and financial institutions, and it helps them process 12,000 transactions every second. In addition, the company's white label software powers the customer-facing online banking portals for many of its clients. But Fiserv's largest segment is focused on helping 6 million merchants accept credit card payments in-store driven by its cloud-based Clover point-of-sale brand. It's currently set to process $197 billion in transactions on an annualized basis.

While Fiserv stock is down 10% in 2022 so far, it has handily outperformed the Nasdaq-100 index, which has declined by more than 28%. Investors tend to favor profitable companies that return money to shareholders when markets are volatile, because they can offer a stability that high-flying growth stocks can't. In Q1 2022, Fiserv repurchased $500 million worth of its own shares, taking its total buybacks to a whopping $3.8 billion over the last two years alone. Share buybacks are a popular tool among investors because they reduce the company's share count and therefore, organically lift the value of each share outstanding. 

Fiserv's growth rate is expected to slow amid the tighter economic conditions. It generated $15.3 billion in revenue in 2021, which analysts expect to increase by 7.5% to $16.5 billion this year. But its profitability makes the stock a great value right now. The company has generated $5.81 in adjusted earnings per share on a trailing-12-month basis, placing its stock at a price-to-earnings multiple of 16.  That's a 33% discount to the Nasdaq-100 index, which trades at a multiple of 25.

For investors looking for some shelter in the tech bear market, in addition to a diverse financial services company with strong upside potential as things recover, Fiserv is an excellent candidate.

A person sitting at their desk smiling at their laptop computer.

Image source: Getty Images.

A diamond in the rough

Jamie Louko (The Trade Desk): Oftentimes, the best buying opportunities come when there is nothing but fear in the market, and I think that is the case with many tech stocks today. Fast-growing, cash-generative companies have been crushed, but as stocks recover, I think The Trade Desk could lead the charge. 

The Trade Desk helps advertisers find digital ad space to promote their business, which can be difficult to do alone. Without facilitators like The Trade Desk, advertisers would have to hunt for publishers by themselves, and there would be no guarantee that the digital ad inventory they find would be the best way to reach their target audience. However, The Trade Desk has partnerships with over 225 publishers to help advertisers find inventory that will result in effective marketing. 

The Trade Desk is the leader in this industry according to Gartner's Magic Quadrant, and that dominance is paying off. It generated $315 million in first-quarter revenue, with over 43% of that turning into free cash flow. The company can use this cash generation to capitalize on the major opportunity ahead. 

Despite being a leader, The Trade Desk still has plenty of room to expand. In 2021, the company had roughly $6.2 billion in ad spending run through its platform, but there was $439 billion in digital ad spending globally during the same period. 

One of the risks that could come to light in 2022 is the possibility of a recession. In a recession, businesses might have to cut back ad budgets, decreasing activity on The Trade Desk. While long-term investors should keep this in mind, it is important to realize that this is a short-term issue that affects the entire industry, not The Trade Desk alone. This could temporarily crimp the business, but investors who are focused on the next decade could still see amazing success from The Trade Desk, even if it was impacted by a recession. 

Beaten-down industry leaders that still generate cash during these downturns are often ones that will thrive over the long term, and The Trade Desk checks all those boxes. Shares have fallen 54% year to date, giving investors an appealing price right now if the company can continue taking market share of the digital advertising space.

An aerial photo of dozens of houses and the beach in a coastal suburb.

Image source: Getty Images.

The travel rebound

Trevor Jennewine (Airbnb): For two years, people lived under lockdowns and social distancing protocols. But as the impacts of the pandemic fade and life returns to normal, people are eager to travel and experience the world again. That makes Airbnb a prime candidate to lead the market rebound.

Its platform connects 4 million hosts with potential guests, helping people plan trips around the world. Guests can book stays anywhere from scenic villas and quaint cottages to suburban homes and urban apartments. Airbnb even lists a variety of unique lodgings like castles and treehouses. Better yet, travelers who don't have specific dates or destinations in mind can use the platform to surface personalized recommendations.

That distinguishes Airbnb from traditional hospitality options. No hotel can match the breadth or utility of Airbnb's platform, and it all comes down to its asset-light business model. The company doesn't actually own any rental properties. Instead, it crowdsources them from a growing network of hosts in over 100,000 cities. That means Airbnb can add new properties in minutes, without spending much money. Meanwhile, it takes months and costs millions of dollars to build a new hotel.

Thanks to that agility, Airbnb has rebounded rapidly from the pandemic and its business is growing like wildfire. Over the past year, revenue surged 93% to $6.6 billion, and the company generated $2.8 billion in free cash flow, up 434% from the prior year.

Airbnb's brand authority and capacity for innovation should keep it at the forefront of the travel industry. For instance, the company recently added "categories" to its platform -- qualifiers like "countryside," "tropical," and "amazing pool" -- giving travelers yet another way to find the perfect stay. It also added "split stays" to search results, making it easy for guests to split a single trip across two rental properties.

Prior to the pandemic, travel and tourism accounted for more than 10% of the global economy. To that end, Airbnb puts its addressable market at a whopping $3.4 trillion. And with summer heating up in the U.S. and Europe, people are already flocking to the platform to book trips. That's why Airbnb could lead the market rebound, and why it looks like a smart long-term investment.