Even with some recent recovery, the Nasdaq Composite index's level is still down roughly 25% year to date. Many growth-dependent companies in the index have seen even bigger sell-offs across the stretch.
With inflation, rising interest rates, and other risk factors creating uncertainty and limiting upside potential in the near term, it's not hard to see why investors have fallen out of love with growth stocks. On the other hand, the turbulence currently shaping the market may have also created rare buying opportunities. Taking a buy-and-hold approach to these stocks in particular could put you on the path to life-changing returns.
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1. Airbnb
Airbnb (ABNB 1.09%) has been posting strong business performance, but it's still been caught up in recent market volatility. The company's share price now trades down 55% from the high that it hit in February 2021.
Despite headwinds including inflation and high gas prices, the travel industry is seeing a strong recovery this year. Airbnb is benefiting from that trend, growing sales 74% year over year in the first quarter on a currency-neutral basis. Its next quarterly reports could be even more impressive.
I expect that Airbnb will report very strong results with its upcoming second-quarter earnings release, but its third-quarter report could be even more impactful when it comes to changing the narrative surrounding the stock. Spurred by the summer travel season, Q3 is typically Airbnb's best quarter, and the company will likely post sales and earnings performance that blows its previous records away. More importantly, the company's growth story is still in early innings.
With more than 4 million hosts listing properties on its platform and over a billion guest stays in the books, Airbnb has already disrupted the travel and hospitality space, but it still has huge long-term growth potential. In addition to its accommodation rental services, the company has also integrated a booking service for experiences, and pairing ticket sales for local events with its core property rentals could turn into a big sales driver. The company has also been seeing increased lengths of stay for rentals through its platform, and it could see continued benefits as remote work changes the way people live and travel.
Airbnb is a fantastic company. At current prices, the stock offers huge upside for long-term investors.
2. ASML Holding
ASML Holding (ASML -2.05%) is one of the world's leading providers of semiconductor manufacturing equipment, and it's on track to benefit from soaring chip demand over the long term despite recent setbacks. Unsurprisingly, the stock has seen a big pullback amid valuation pressures impacting the market at large.
However, the company's share price has also recently lost ground following news that U.S. regulators are pressuring the equipment specialist to stop selling equipment to China -- a move seemingly designed to impede the country's moves to ramp up its own chip production initiatives. ASML stock now trades down roughly 43% year to date and 50% from the lifetime pricing high reached last September.
While its share price has plummeted, the company may actually be on track to benefit from regionalization and localization trends reshaping the semiconductor industry.
ASML PS Ratio (Forward) data by YCharts
Geopolitical headwinds are a major concern right now, but the significance of semiconductor production along economic and national security fronts also highlights the value of ASML's technologies and services. Because chips are so important to industry, everyday life, and national defense, the U.S., Europe, and many other countries are making moves to bolster their chip production capabilities.
ASML is set to play a key role in meeting rising semiconductor demand, and long-term investors can take advantage of the recent valuation drawdown for this company that's shaping the future.
