Inflation has consistently eased since reaching a high of 9% in June 2022, with the Consumer Price Index rising 3.7% last month. The cost of living is moving in the right direction, with many experts saying inflation will likely continue easing through 2024. However, Wall Street remains apprehensive, as many companies have continued to suffer from reductions in consumer spending.
Market uncertainty makes now an excellent time to invest in solid growth stocks with plans to hold shares for the long term. Companies active in consistently expanding industries might suffer temporary dips if faced with macroeconomic headwinds but could offer significant gains over many years. So, strengthen your portfolio by considering an investment in these two growth stocks this October.
1. Apple: The king of consumer tech
Investors have slightly pulled back on Apple (AAPL 2.60%), with its stock down 7% since the start of August. Macro challenges have caught up with the company, as slowing product sales have led to three consecutive quarters of revenue declines. In the third quarter of 2023, net sales fell in three of Apple's four product segments, with total revenue tumbling 1% year over year.
However, recent headwinds are why keeping a long-term perspective with growth stocks is essential. Despite poor economic conditions, Apple's operating income barely budged in Q3 2023, hitting $23 billion.
Meanwhile, the company's dominance in consumer tech has allowed it to stay resilient during a market downturn. Counterpoint Research shows U.S. smartphone shipments decreased by 24% year over year in Q2 2023. Consequently, Samsung's sales fell 37% during the period. However, consumer preference for Apple meant its sales dipped a more moderate 6%, allowing it to grow its market share from 52% to 55%.
NASDAQ: AAPL
Key Data Points
The iPhone company performed similarly in the burdened PC market. Global PC shipments fell 13% in Q2 2023. Yet, Apple experienced growth of 10% in its MacBook business, while competitors like Dell and Lenovo saw declines of 22% and 18%.
Apple holds leading market shares in the majority of its product categories. The company has strategically created an interconnected ecosystem for its products that discourages users from straying to the competition. Its dominance in the market has seen its revenue soar 52% over the last five years, with operating income up 87%.
The tech giant's ability to outperform the competition during economic headwinds makes its stock a reliable investment over the long term. Meanwhile, a booming services business and a growing venture in artificial intelligence only strengthen the argument for this growth stock.
2. Costco: The reliable buy with plenty of growth potential
Costco (COST +0.80%) is easily one of the best growth stocks in retail. The company's unique business model of offering wholesale products at market-low prices for an annual subscription fee has won over shoppers worldwide. Its success delivered revenue growth of 59% since 2019, with operating income rising 71%.
Meanwhile, Costco has gained a reputation for reliability among stockholders. The chart illustrates how its shares enjoyed considerably more growth over the last five years than some of the biggest retail companies in the U.S.
Data by YCharts
Meanwhile, as companies like Walmart and Target haven't strayed very far from North America, Costco has significantly profited from its expansion abroad -- and so have investors. Costco now operates in 14 countries but continues to have massive growth potential. In five of those countries, the company manages four or fewer stores, suggesting plenty of expansion opportunities. In France alone, Costco hosts two locations but has plans to build 12 more after winning over residents.
NASDAQ: COST
Key Data Points
In Costco's Q4 2023 (ending in August), revenue rose 9.5% year over year, beating analysts' forecasts by more than $1 billion. The company has stayed resilient despite economic headwinds, making it an excellent stock for the long term. Costco could be on a promising growth trajectory, and you won't want to miss out.
