It's rough out there for investors. The S&P 500 now sits more than 22% below January's peak, reaching a new 52-week low just last week as a result of the pullback. And it feels like stocks could move even lower before all is said and done.
As tough as it may be to do right now, however, investing experts will tell you that this is a time to buy rather than a time to panic. We don't know if the market is at its exact bottom right now, but we do know stocks are much cheaper right now than they usually are. Five years from now, timing the market's actual low point won't matter much to those with a long-term investing plan.
With that as the backdrop, if you've got an extra $3,000 you're not going to be needing anytime soon, here's a rundown of three of the best picks you can feel good about adding to your long-term portfolio.
1. Amazon
Yes, online marketplace behemoth Amazon (AMZN -1.64%) ran into a wall of inflation during its first quarter of the year. Its usually profitable e-commerce operation actually lost money here and abroad during the three-month stretch in question. And given that freight and employee compensation costs have only grown since then, don't look for its online sales arm to get back in the black for the second quarter, either. The worry about this lack of profitability may be one of the key reasons Amazon share prices are down 37% just since late March.
What this underlying doubt overlooks, however, is how Amazon's core business growth driver is no longer the selling of goods. Its chief moneymaker is cloud computing. Back in 2021, before inflation began running rampant and dragging the company's e-commerce arm into the red, Amazon Web Services accounted for 75% of Amazon's operating income despite only making up 13% of its top line. Moreover, AWS' operating income was up 37% year over year -- growth that was accelerated to 56% during the first quarter of this year.
And it's not just AWS. In February -- for the first time ever -- the company disclosed how much advertising revenue it's now generating. Last year's tally of $31.2 billion is impressive, to say the least, with its fourth quarter capping off the year with 32% year-over-year growth. And it's just getting started.
Ironically, Amazon may make more profit selling ads for the merchandise it's offering than it ever actually made selling merchandise.
2. SolarEdge Technologies
There's arguably never been a better time to invest in solar power. Oil and natural gas prices are through the roof, dramatically raising consumers' utility bills. Cultural and political support for clean, renewable energy has also never been firmer. The end result? The U.S. Energy Information Administration (EIA) estimates that about half the country's electricity production capacity growth this year will come from solar panel installations. That still only scratches the surface, however. The EIA also indicates that as of the end of last year, less than 3% of electricity in the U.S. comes from solar. This leaves a lot more room for solar's growth.
Enter SolarEdge Technologies (SEDG 1.92%).
As the name suggests, it's a solar power play, but it's not a panel maker -- an aspect of the business that has not only become commoditized but is increasingly complicated by politics. For instance, President Joe Biden recently suspended tariffs on certain solar panels imported into the U.S. to support his clean energy agenda, but some are saying the reprieve unfairly favors foreign manufacturers over U.S. panel makers.
Rather, SolarEdge makes and markets solutions that are now far more important to the business than the panels themselves: the means of managing the solar power that panels collect. In addition to monitoring systems, its tech manages energy storage systems, and can readily integrate with electric vehicle charging stations.
The all-in-one platform is well received by the public if the company's forecasted top and bottom lines are any indications. Analysts are collectively calling for revenue growth of 55% this year to be followed by 26% growth in 2023. This should in turn double SolarEdge Technologies' 2021 earnings of $4.81 per share to $9.68 next year.
3. ServiceNow
Finally, add ServiceNow (NOW 0.72%) to your list of stocks to buy if you've got $3,000 burning a hole in your pocket.
It's not a household name, but there's a good chance you or someone in your household has been impacted -- for the better -- by its product. ServiceNow offers businesses a means of building customized digital workflows without the need for computer coding.
And it works. It's such a powerful platform, in fact, that IT research outfit Gartner named ServiceNow the single-best company in the IT service management space for 2021, marking the eighth consecutive year it's been at least one of the best in this sliver of the tech sector. Organizations ranging from professional sports leagues to universities to other tech companies are plugged into ServiceNow's platform one way or another, and better off for it. As an example, Infosys Limited says ServiceNow's features save up to 45% of its help desk agents' time. Ultimately, that saves money, which is why ServiceNow's top line has been and continues to grow right around 25% per year.
There's no end in sight for this growth, either. The workflow automation movement is expanding so rapidly that Gartner is starting to use the term "hyperautomation," which it predicts will become nearly a $600 billion market this year, up from last year's $532 billion. Gartner adds that by 2024, organizations will be collectively leveraging hyperautomated workflows to reduce operational costs by 30% from current levels.
