In less than two and a half months, the curtain will close on what looks to be one of the toughest years on record for investors. The benchmark S&P 500 produced its worst first-half return since Richard Nixon was president, while the technology-dependent Nasdaq Composite, which fueled the broader market higher, peaked at a decline of 38% from its all-time high set last November. Even the bond market is on track for its worst year ever.

Although bad news is abundant, there is a silver lining. Historically, every double-digit percentage decline in the major U.S. indexes has represented an ideal buying opportunity. That's because every downturn is eventually fully recouped (and some) by a bull market rally. For patient investors, these dips are a golden opportunity -- and it's what makes 2023 look all the brighter.

For patient investors with cash to spare, which won't be needed for bills or emergencies, the following four remarkable stocks have the tools and intangibles necessary to potentially double your money in 2023.

Plastic numbers spelling out 2023 that are placed atop a circular fanned assortment of cash bills.

Image source: Getty Images.

Upstart Holdings

In 2022, cloud-based lending platform Upstart Holdings (UPST -0.69%) has been a frustrating stock to own for investors. Shares have fallen as much as 95% from their all-time high set roughly one year ago. A mix of rapidly rising interest rates and the growing prospect of a U.S. recession increasing loan delinquencies have folks worried about the near-term prospects for Upstart's loan-vetting services.

But I prefer to take a bit of a longer view with Upstart, which has demonstrated that its technology works very well during extended periods of economic expansion -- and the U.S. economy spends much longer expanding than contracting.

What really helps Upstart stand out is its artificial intelligence (AI)-based lending platform. Instead of relying on credit scores to determine whether a loan applicant is approved or not, Upstart leans on machine-learning and AI to approve and fully automate close to three-quarters of all loan applications.  This is saving loan applicants time, and its approximately six-dozen lending partners money.

In addition, Upstart's loan platform has led to applicants being approved who wouldn't have made the cut with the traditional vetting process. Although Upstart approvals are sporting a lower average credit score than the traditional process, the delinquency rate between the two processes has been similar. The takeaway being that Upstart can bring new customers to banks and credit unions without adversely impacting their credit-risk profiles.

Even with a challenging quarter or two ahead, Upstart's AI-lending platform has the potential to double this company's valuation in 2023.

Lovesac

If you're a fan of under-the-radar companies, furniture stock Lovesac (LOVE 2.31%) is one to consider that can double your money in 2023. Although Wall Street appears worried about the company's rising inventory levels, a compound annual growth rate of 55.3% over the past four fiscal years should assuage any concerns.

Normally, "furniture stock" is a phrase you utter to people if you want to put them to sleep. Most furniture retailers are slow-growing and rely on the same small group of wholesale product suppliers. But Lovesac is disrupting this stodgy industry with both its furniture and sales model.

Originally, Lovesac was known for its beanbag-styled chairs called "sacs." Nowadays, almost 88% of its net sales come from sactionals, which are modular couches that can be rearranged a variety of ways to fit most living spaces. Sactionals have more than 200 different cover choices, which means they'll match any theme of a home, and the yarn used in the covers is made entirely from recycled plastic water bottles. It's an ecofriendly product with plenty of choice and functionality for buyers.

While the company does operate 174 retail locations, it's omnichannel sales model is what's truly impressive. During the pandemic, Lovesac was able to shift half of its sales online. Sprinkle in popup showrooms and brand-name partnerships, and Lovesac has a recipe to keep its overhead costs substantially lower than its peers. These juicier margins are what pushed Lovesac to profitability years before anyone expected.

Valued at a forward price-to-earnings ratio of 5 with a sustained sales growth rate in the double digits is far too cheap for an innovator like Lovesac.

A couple meeting with a real estate agent in front a two-story house.

Image source: Getty Images.

Redfin

Real estate-services company Redfin (RDFN -1.25%) is a third remarkable stock that might be best described as a bad-news buy for 2023 that could double your money.

It's no secret that a hawkish Federal Reserve and rapidly rising Treasury bonds spell trouble for the housing industry. With home prices falling and mortgage rates climbing to their highest point in more than a decade, it's only logical that demand for homebuying and selling slows down. Obviously, not great news for Redfin. But perhaps too negative a reaction, with shares now down close to 96% from their all-time high.

What should help Redfin secure a greater share of U.S. existing home sales in a challenging environment is its two clear-cut competitive advantages. To begin with, Redfin offers its services at a lower cost than traditional real estate companies. Whereas most agencies/agents charge up to 3% listing fee, Redfin charges customers 1% or 1.5%, depending on how much prior business was done with the company. In August, the median sales of existing homes sold in the U.S. was $389,500.  A Redfin customer could be saving up to two percentage points, or almost $7,800.

Redfin also possesses personalization tools and services that traditional real estate companies can't match. Redfin Concierge helps sellers maximize the selling price of their home by offering assistance with renovations. Meanwhile, RedfinNow is an iBuyer service that purchases homes for cash. These homes can be held by Redfin to appreciate in value or sold at a later date (hopefully at a profit).

While the coming months will assuredly be bumpy for the housing market, Redfin's competitive advantages and market share gains give it a real chance to double your money next year.

Nio

A fourth and final remarkable stock that could double your money in 2023 is China-based electric-vehicle (EV) manufacturer Nio (NIO 3.95%). Despite the auto industry contending with significant headwinds, such as semiconductor chip shortages and historically high inflation, Nio is perfectly positioned to grow production and its share of China's nascent EV market.

On one hand, investors can consider Nio being headquartered in China as a bit of a curse. China's zero-COVID policy has led to lockdowns that have hurt the company's supply chain and, at times, its production capacity. On the other hand, China is the world's top auto market, and by 2035 roughly half of all vehicles sold in the country are expected to run on some form of alternative energy. Once supply chain issues begin to resolve in 2023, Nio may be able to ramp up production from its current pace of about 10,000 to 11,000 EVs per month to possibly as much as 50,000 EVs per month in about a year. 

Demand for Nio's EVs has been strong, which is a reflection of the company's ever-growing product line. This is a company that's attempting to introduce at least one EV annually. It's also a relatively new player that's had success delivering competitive edges over its competition. The company's two recently released sedans, the ET7 and ET5, sport 1,000-kilometer (621 miles) ranges with the top-tier battery upgrade. That's a figure which blows virtually all of its competition out of the water.

Another point I love to make about Nio that really drives home its innovation is the introduction of the battery-as-a-service (BaaS) subscription two years ago. BaaS is primarily used by subscribers to charge, swap, and upgrade their batteries. Enrollment also gives buyers a discount on the purchase price of their EV. Though BaaS means Nio is giving up some near-term vehicle margin, it recoups this initial discount via high-margin recurring subscription revenue, as well as retaining the loyalty of its early buyers.

If supply chain issues do, indeed, resolve in 2023, Nio's prospects for hitting recurring profitability in 2023 or 2024 will brighten immensely. That could be all that's needed for Nio to double your money.