The buying decisions that investors make right now could pay off in droves in even a few years. Beaten-down stocks that look hopeless today may not appear that way in the future when the economy stabilizes -- because it will, eventually. History has taught investors that from every downturn and crash, there is always a recovery to follow. Warren Buffett always warns investors, "Never bet against America."
Investors can bet on the future and buy some deeply discounted stocks right now in Teladoc Health (TDOC 2.46%) and Nvidia (NVDA 4.35%). Although these look like they are destined to sink lower, here's why in the future, you could be thanking yourself for buying these stocks at their current prices.
1. Teladoc Health
Teladoc Health was a hot buy during the early stages of the pandemic, but amid a return to normal, it's been a complete reversal of fortunes for this promising healthcare stock.
Teladoc helps connect patients and doctors through their screens and has the potential to be a disruptor in the healthcare industry by adding efficiency in the way of cutting down on in-person visits to the doctor's office. The telehealth company also makes it easier to have quick check-ins and stay on top of chronic conditions like diabetes.
In a growing and more digitized healthcare industry, Teladoc and other telehealth providers have tremendous long-term potential.
However, this year, investors have seemingly forgotten about that potential, with shares of Teladoc crashing a whopping 73%. That is far worse than the S&P 500 has performed, with the broad index down 20% over the same period. The stock is also nowhere near its 52-week high of $156.82, down close to 85% from that peak.
But investors should keep their eyes on the prize: the long-term potential for Teladoc, as there's tons of it. For instance, top health insurance company UnitedHealth Group is utilizing telehealth as a way to add efficiency to its business and cut costs and wasteful spending. In some situations, patients will first need to have a virtual visit before they can make an in-person trip to the doctor's office.
Teladoc's primary care service, Primary360, also makes it easier for patients to receive a personalized care plan to stay on top of their needs. That service is still in its early stages, with Teladoc only rolling it out a year ago.
This year, the company doesn't expect to make a profit, but it is projecting revenue of up to $2.5 billion and total virtual visits of up to 19.3 million. That's already significant growth from the $1.1 billion in revenue it generated in 2020 and the 10.6 million virtual visits it recorded back then. And this is a stock that's still in the early innings of its growth story. In a few years, today's price could look like a bargain.
2. Nvidia
There's a huge chip shortage in the world, and one company that is in a great position to profit from that is Nvidia. But as with Teladoc, investors have been focusing on the near-term concerns rather than the long-term opportunities.
While demand for personal computers is down and the U.S. government is blocking the sales of some of the company's chips to Russia and China, the long-term potential remains strong for Nvidia. As more devices become connected to the Internet and dependent on chips, the greater the potential for a market leader like Nvidia there will be in the long run.
The company estimates that there is a $1 trillion market opportunity for it to tap into, with chips and systems as just one piece of that potentially worth $300 billion. There's another $300 billion opportunity in the automotive industry, plus $150 billion in the omniverse (i.e., the metaverse for engineers), $150 billion in enterprise software for artificial intelligence, and another $100 billion in gaming. For a company that has generated close to $30 billion in revenue over the trailing 12 months, Nvidia is only scratching the surface of what it can achieve in the long run.
Nvidia's near-term headwinds are just short-term problems for the company and are not something that should detract investors from what's still a solid business that generates impressive profit margins of 26%, and that's likely to get a whole lot bigger in the future.
Trading at around $126 on Monday, the stock is down 64% from its 52-week high of $346.47. Even if it doesn't get back to those levels anytime soon, the stock can still be a terrific buy for the long haul.
