In 2022, the Nasdaq Composite index plunged 33% as macroeconomic headwinds curbed consumer discretionary spending and businesses trimmed their budgets. Countless companies across different industries reported declines throughout the year.
However, 2023 has seen a resurgence of bullishness among investors. The market has been in recovery mode, with companies benefiting from easing inflation and improving market conditions. The Nasdaq Composite is up nearly 30% since Jan. 1, and some analysts have declared the start of a new bull market.
As a result, now is an excellent time to invest in companies that are likely to profit the most from the improving conditions. Here are two ultra-growth stocks that are leading the market recovery.
1. Amazon
Amazon (AMZN -0.87%) was hard hit last year as its e-commerce segments reported substantial profit declines. However, the company has benefited massively in 2023. Its stock has soared by 58% year to date thanks to consistent improvements in its earnings and a growing venture in artificial intelligence (AI).
In the second quarter, Amazon reported operating income of more than $3 billion in its North America segment, which booked a loss of $627 million in the year-ago period. The improvement triggered a stock bump as Wall Street celebrated the retail giant's return to form.
The quarter also saw a 12% year-over-year increase in revenue for the company's cloud platform, Amazon Web Services (AWS). The industry has surged in recent years as more companies have moved their businesses online, with Amazon profiting from its leading market share in the cloud infrastructure space. AWS has experienced slowing growth amid macroeconomic challenges. However, an expansion into AI, its dominance in the cloud market, and easing inflation could make it Amazon's most lucrative business over the long term.
Amazon's strong positions in multiple markets give stockholders the chance to profit from the development of several industries. With the share price still down 29% from its July 2021 high, Amazon is an attractive buy as it leads the market's recovery.
2. Apple
Apple (AAPL -2.88%) had a relatively easier time than Amazon last year. Though its stock fell by 27% throughout 2022, the result was still enough to outperform the Nasdaq Composite. The tech giant's premium-priced products and booming services business made its stock a haven for investors seeking respite from poor market conditions.
Reductions in consumer spending on tech have caught up with Apple in 2023; it reported sales declines in multiple product segments in its fiscal third quarter, which ended July 1. However, the company has continued to outperform the competition, proving its strength and resilience during challenging conditions.
Data from Counterpoint Research shows that smartphone sales fell 24% year over year in Q2 2023. Samsung sales decreased by 37%. Yet, Apple's iPhone sales fell a more moderate 6%, allowing it to grow its market share from 52% to 55%. The company has performed similarly throughout the last year in the smartphone and PC markets.
Apple is the most valuable company in the world, with a market capitalization of $2.8 trillion, and when its shares fall, they are rarely down for long. The tech giant has a history of exceeding the growth of its peers and the market. In fact, Apple's stock is up by 228% over the last five years, significantly more than Microsoft, Alphabet, or Meta Platforms.
After Apple posted dismal results for its fiscal Q3 on Aug. 3, the company's shares tumbled. They're now down by about 8% since the start of August. However, that dip has only made them more attractive. Apple's leading market share in multiple product categories, its expansions in AI and virtual/augmented reality, and its swiftly growing digital services business make it a solid investment opportunity.
Apple outperformed a falling tech sector in 2022, and its nearly 40% stock growth this year is boosting investors' portfolios. The company is an excellent option at almost any time, but especially amid a market recovery.
