The stock market is in recovery mode in 2023, and the technology sector is leading the way with the Nasdaq-100 index jumping 38% so far. Still, many individual tech stocks remain down heavily from relatively recent all-time highs. That's because high inflation and rising interest rates sucked the air out of so many fast-growing companies. 

This lack of widespread recovery spells opportunity for investors, but not all beaten-down stocks are created equal. While some represent potential great value, others might never recover. So it's crucial to be selective. After all, generating long-term wealth isn't just about picking winners, it's also about avoiding the metaphorical landmines that sometimes come with investing.

With that in mind, here's one unstoppable growth stock to buy, and one to sell. 

The stock to buy: Confluent

Share prices of Confluent (CFLT 2.98%) have rocketed 59% higher in 2023, outpacing the return of the broader stock market. Investors are impressed by the company's operating performance because it beat its own financial forecasts in both the first and second quarters of this year.

Confluent's business includes being a leading data streaming platform. Businesses are increasingly adopting cloud computing and shifting their operations online, which means they're sending record amounts of digital information to data centers. In the past, those businesses would come back to that data at a later date for analysis. With Confluent, they can now process the data in real time.

That has a range of benefits for Confluent's clients. It enables them to make instant decisions based on the live purchasing habits of their customers to maximize revenue, and it can also streamline tasks like inventory management to ensure shelves are always stocked. Data streaming also resulted in new consumer experiences. Live, in-game sports betting is one example. Bookmakers can use Confluent technology to calculate odds, feed them to the customer, and accept bets in a matter of seconds.

At the end of 2023's Q2, Confluent had 4,830 business customers. It's experiencing the most growth from its highest-spending cohorts. It had 1,144 customers spending at least $100,000 annually on its platform, up 33% year over year, and it had 147 customers spending at least $1 million annually, up 48% year over year.

On top of that, its net revenue retention rate of 130% suggests existing customers are spending about 30% more money with Confluent in each passing year. Overall, the combination of factors led to $189.3 million in Q2 revenue, which was comfortably above its $183 million forecast. It prompted the company to increase its full-year revenue guidance to $772 million (a $7 million jump).

Despite the strong gain in Confluent's stock price in 2023, it's still down 63% from its all-time high. That's an opportunity for investors because the company says it's chasing a $60 billion addressable market, and based on its 2023 revenue guidance, it has barely scratched the surface so far. 

The stock to sell: Robinhood

Robinhood Markets (HOOD 4.44%) is facing a situation that is practically the opposite of Confluent's. Its business is in decline by a few different metrics, and it hasn't shown much evidence it can recover. Robinhood is an online investment platform that offers brokering services across stocks, options contracts, and cryptocurrencies to a client base that skews toward younger investors.

First-time investors, primarily from Generation Z, seemed to flock to Robinhood during the meme-stock frenzy in 2020 and 2021. The platform acquired 22.5 million funded client accounts by the middle of 2021, and 21.3 million of those customers were using it every single month. Since then, the acquisition of new users has stalled. Robinhood only added 700,000 new funded accounts in the two years since mid-2021, and in the second quarter of 2023 (ended June 30) it had only 10.8 million monthly active users.

That's a 49% plunge in active users, and the worrying part is that it appears to be a structural issue -- those customers didn't abandon Robinhood overnight, they've been steadily walking away each and every quarter since mid-2021 and haven't returned.

The company did manage to grow its revenue by an impressive 53% year over year in the recent second quarter, but this metric can be deceiving. Its transaction revenue -- which is derived from clients buying and selling financial assets -- declined 4% year over year in Q2. The big gain in revenue came as a result of higher interest rates, because Robinhood has over $6.3 billion in cash on its balance sheet plus another $3 billion it's holding for clients, so it's earning a truckload of interest income. 

But that's unlikely to last because many experts believe the U.S. Federal Reserve will start cutting interest rates in early 2024. Investors should mainly focus on Robinhood's transaction revenue, because when all is said and done, that reflects the health of its core business. Unfortunately, it's going to be very difficult to spark a sustained recovery in that metric if the platform's user base continues to shrink.

As a result, I certainly wouldn't rush to buy Robinhood stock even though it's down a whopping 87% from its all-time high.