A sell-off in 2022 dragged down the stocks of countless companies, with consumer-reliant businesses hit the hardest after steep rises in the cost of living. However, easing inflation this year has put the market on a recovery path, with a few key stocks leading the way.
Amazon (AMZN -1.61%), Walt Disney (DIS 2.17%), and Apple (AAPL 0.50%) have each enjoyed double-digit stock rises since Jan. 1, as seen in the chart below.
Data by YCharts
These companies dominate their respective industries, making them crucial to future market growth. With inflation improving on a monthly basis, now is an excellent time to consider investing in these stocks before they become a missed opportunity.
1. Amazon
As a market leader in e-commerce, rises in inflation and reductions in consumer spending hit Amazon particularly hard last year. Its stock plunged nearly 50%, alongside its North American and international segments reporting operating losses totaling $10.6 billion in fiscal 2022. However, temporary losses don't diminish Amazon's position as an attractive growth stock, with the company expected to flourish over the long term.
The e-commerce market hit a value of $4 trillion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 11.5%. That forecast would see the industry hit $6.4 trillion by 2027, with Amazon's leading market share likely to see the company profit significantly.
In addition to e-commerce growth, the tech giant is home to a booming cloud business through its platform Amazon Web Services (AWS), which allows it to lean less on retail business amid economic downturns. In fact, AWS kept the company profitable in 2022, hitting $22.8 billion in operating income.
Amazon stumbled last year, but its future is bright, and Wall Street is taking notice. Along with year-to-date stock growth, its average 12-month price target is 34% higher than its current position. And with that, Amazon is a must-buy right now.
2. Walt Disney
Disney investors haven't had it easy in recent years, with the COVID-19 pandemic temporarily shuttering the company's cinema and theme parks businesses. Then, macroeconomic headwinds in 2022 made expanding the streaming market costly. The challenges meant the company's stock has decreased over the last five years by just under 1%.
However, recent hurdles are unlikely to repeat, with Disney's 10-year stock growth of around 70% more indicative of what's to come. As the home of potent brands such as Marvel, Star Wars, Pixar, and Walt Disney Studios, the entertainment giant has compelling ways to attract consumers to its parks, streaming content, and box office offerings.
Meanwhile, Disney CEO Bob Iger plans to cut costs by $5.5 billion, with the majority of savings driven by reductions in content spending. The move is a positive step as it works to make its flagship streaming service, Disney+, profitable by 2024.
Disney is on a growth path, with its average 12-month price target of $128.50 projecting a 29% stock rise. The company has been a key player in the market's recovery this year and will likely continue leading the way for years to come.
3. Apple
Apple has proved its resilience and stability over the last year. Its stock has seen the highest year-to-date rise on this list while also experiencing the lowest decline in 2022, as shown in the table below.
Data by YCharts
The company's strength mainly stems from its leading market shares in multiple areas of consumer tech, such as smartphones, tablets, smartwatches, and headphones. Alongside winning hardware, Apple is home to a thriving digital services business that has strengthened its earnings by lessening its dependency on iPhone sales. For instance, in fiscal 2022, services revenue growth hit 14%, double the growth in its iPhone segment.
As the world's most valuable company by market cap, Apple plays a pivotal role in the market's health. The company's low volatility propped up the market last year, with its 27% rise since Jan. 1 leading its recovery in 2023. As a result, the tech giant is one of the most reliable investments out there and an ultra-growth stock worth considering.
