Over multidecade stretches, Wall Street is a bona fide wealth-building machine. But getting from Point A to B doesn't happen in a straight line. Corrections, crashes, and even bear markets are normal and inevitable aspects of putting your money to work on Wall Street.
Last year, all three major stock indexes plummeted into a bear market, with the growth-fueled Nasdaq Composite (^IXIC 2.02%) truly taking it on the chin (a 33% decline). In 2023, the Nasdaq Composite has been virtually unstoppable, with a 31% year-to-date gain, as of the closing bell on Sept. 18.
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But even after this sizable rally, the Nasdaq remains nearly 15% below its record-closing high, which was set in November 2021. While that might seem disappointing to some investors, it's actually a blessing in disguise. Since the major stock indexes have eventually erased every correction and bear market in their storied history, the Nasdaq Composite being well below its all-time high just means bargains still abound for opportunistic investors -- especially when it comes to growth stocks.
What follows are four awe-inspiring growth stocks you'll regret not buying in the wake of the Nasdaq bear market dip.
Meta Platforms
The first unsurpassed growth stock you'll be kicking yourself for not adding, with the Nasdaq Composite still well off of its record-closing high, is social media giant Meta Platforms (META 0.43%). Even though the current environment for advertising is challenging -- Meta generates more than 98% of its sales from ads -- Meta's clearly defined competitive advantages and appealing valuation make it a no-brainer buy.
Despite facing an endless barrage of new competition in the social media space, Meta's four core assets continue to deliver. Facebook, Instagram, WhatsApp, and Facebook Messenger are consistently among the most-downloaded apps in the U.S. and worldwide. Additionally, Threads, which launched in early July as a direct competitor to X, the platform formerly known as Twitter, broke records when it grew to more than 100 million users in just five days.
Meta's family of apps attracted 3.88 billion unique adult visitors during the June-ended quarter, which means more than half of all adults on the planet visited a Meta-owned asset monthly during the second quarter. While there are plenty of places for merchants to advertise, no social media company offers more exposure than Meta Platforms.
Further, Meta can take risks that other social media companies can't. Thanks to its more than $53 billion in cash, cash equivalents, and marketable securities, along with the $31.3 billion the company generated in net cash from operating activities through the first six months of 2023, Meta is able to aggressively invest in augmented/virtual reality innovations, as well as CEO Mark Zuckerberg's metaverse ambitions. Even growing losses from its metaverse-driven segment (Reality Labs) are dwarfed by the immense profitability and cash flow of the company's ad-driven social media assets.
Meta Platforms is also historically cheap. Despite more than tripling off of its 2022 bear market low, shares of the company are trading for less than 11 times estimated cash flow for 2024. That's well below the multiple of nearly 16 times cash flow Meta has averaged over the past five years.
JD.com
A second awe-inspiring growth stock that's begging to be bought following the Nasdaq bear market drop is China's No. 2 e-commerce company, JD.com (JD 6.12%). While China's recent growth slowdown has left some Wall Street analysts worried, JD is a company that has all the puzzle pieces in place to be a long-term winner.
To kick things off, JD should be a prime beneficiary of the reopening of the Chinese economy. Following more than three years of stringent COVID-19 mitigation measures, China abandoned its controversial COVID-19 policies in December. However, reversing years of supply chain issues and constrained buying activity won't happen overnight. As life returns to normal in one of the world's consistently fast-growing economies, JD's e-commerce platform should benefit.
Speaking of JD's platform, it offers a clear advantage over China's No. 1 e-commerce company, Alibaba. Whereas Alibaba predominantly functions as a host platform for third-party sellers, JD is built like Amazon -- namely, it controls the inventory of goods purchased and handles the logistics of getting goods to consumers. Having more control over its inventory and supply chain gives JD more ability to tweak its cost structure and boost its operating margin compared to Alibaba.
Investors are also set to benefit from JD.com's proposed spinoff of its industrial and property units, which should each be worth around $1 billion when listed on the Hong Kong stock exchange. Spinoffs can help unlock value by making it easier for investors to analyze a company's working parts.
And just like Meta, JD.com is inexpensive. Its forward-year price-to-earnings (P/E) ratio of 9 is the lowest since JD became a publicly traded company in 2014. It would appear that all bad news has been firmly baked in at this point.
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BioMarin Pharmaceutical
The third phenomenal growth stock you'll regret not buying in the wake of the Nasdaq bear market swoon is biotech stock BioMarin Pharmaceutical (BMRN -1.53%). Though BioMarin is fundamentally pricey right now, based on its trailing-12-month (TTM) earnings per share (EPS), it offers a host of competitive edges and is expected to nearly sextuple its full-year per-share profits between 2022 and 2026.
One of the key advantages BioMarin brings to the table is its focus on ultra-rare diseases. While there are added risks of focusing its research on a very small pool of prospective patients, there are ample rewards for drugs approved by the Food and Drug Administration (FDA). Specifically, competition tends to be minimal or nonexistent, and health insurers rarely fight back against high list prices for ultra-rare, novel therapies.
To add to this, healthcare stocks are often highly defensive -- no matter how well or poorly the U.S. economy performs, patients that are taking lifesaving medicines today are probably going to need them tomorrow, the day after, and so on. It means demand for BioMarin's brand-name drugs should remain consistent in any economic environment.
For the moment, Voxzogo is the drug that's primarily powering BioMarin's growth. Voxzogo, which is approved by the FDA to increase linear growth in children aged 5 and older with achondroplasia, should be able to eventually top $1 billion in peak annual sales, with both label expansion opportunities and pricing power driving these gains. BioMarin is in the process of commercially launching Roctavian in the U.S. as a severe hemophilia A treatment as well.
Stop me if you've heard this before, but BioMarin Pharmaceutical's valuation is also attractive. Though it may appear pricey on a TTM basis, it's trading at a P/E of 20, based on Wall Street's consensus EPS forecast for 2026, and offers a compound annual revenue growth rate of nearly 17% through 2026.
The fourth awe-inspiring growth you'll regret not buying in the wake of the Nasdaq bear market dip is social media platform Pinterest (PINS 4.04%). Despite facing the same difficult ad environment that Meta Platforms is contending with, Pinterest has the tools to sustain a double-digit earnings growth rate throughout the decade.
The first thing investors should note about Pinterest is that its monthly active user (MAU) count has steadily grown over long periods. While there were some clear fluctuations caused by the COVID-19 pandemic, Pinterest closed out the June quarter with 465 million MAUs, which is up 8% from the prior-year period. This is a meaningful number of users, which is likely to attract advertising dollars.
To further build on this point, Pinterest hasn't had much difficulty monetizing the MAUs it has. In 2022, global average revenue per user grew by a double-digit percentage. This suggests Pinterest is commanding significant ad-pricing power from advertisers.
But the biggest selling point just might be that Pinterest doesn't have to worry about app developers adjusting their data-tracking tools. Whereas most social media platforms are heavily reliant on data-tracking analytics to help merchants target users, the entire premise of Pinterest's site is for users to freely and willingly share what interests them. This allows Pinterest to serve up meaningful info to advertisers regardless of what app developers are doing.
And of course, Pinterest offers an attractive valuation for long-term investors. Based on Wall Street's 2026 consensus EPS, investors can buy shares at a multiple of 15 times earnings while enjoying a double-digit sales growth rate.
