When you think of successful companies and stocks, Apple (AAPL -0.35%) probably is one of the first to come to mind. The maker of the world-famous iPhone and a slew of other top products and services has seen its earnings climb into the billions of dollars over the past decade, and in more recent times, its market value soar into the trillions.
So, adding Apple to your portfolio might seem like a great idea ahead of the next bull market. And it is, but a couple of other companies actually represent better buys for this next phase of market growth. They both are recovering from difficult times and may be entering a new era of growth, and this could supercharge their shares.
All of this means, right now, you might want to forget Apple -- even if the Apple Watch is sitting right there on your wrist -- and instead try these two potential bull market winners.
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Amazon
Amazon (AMZN 3.43%) had a tough time of it last year. The e-commerce and cloud computing giant reported its first annual loss in about a decade as higher inflation weighed on its costs and on its customers' buying power. On top of this, Amazon also had to deal with excess capacity across its fulfillment network.
But Amazon worked to turn things around by making one important decision: The company decided to improve its cost structure, cutting tens of thousands of jobs, increasing efficiency, and shifting investment into high-growth areas.
Amazon also has made other specific moves to benefit its businesses of e-commerce and cloud computing. For e-commerce, the company transitioned to a regional fulfillment model from a national one to increase package delivery speed and cut costs. For cloud computing, Amazon upped its investment in artificial intelligence (AI), a potentially revolutionary technology for that business.
The efforts already are bearing fruit, with Amazon reporting a return to profit and positive free cash flow as well as revenue growth over the past two quarters. And Amazon stock has rallied, gaining nearly 70% so far this year.
But as Amazon's cost structure improvements continue to develop and deliver results, I could see the stock climbing further in a bull market environment.
Carnival
Carnival Corp.'s (CCL -0.66%) problems started in the early days of the pandemic, when cruise ships were forced to halt operations. That resulted in earnings plunging into negative territory and debt ballooning to a peak of $34 billion.
Since, the company has benefited from two things: its work to cut costs and increase revenue opportunities and the general rebound in demand for cruise vacations. Carnival has taken steps such as replacing older ships with newer, more fuel-efficient ones. And the company offers bundled packages to travelers prior to their cruise -- to get more onboard spend on the books ahead of sailings.
So far, things are looking good. Just recently, Carnival reported records in both revenue and total customer deposits. The company also beat its guidance range for U.S. net income under generally accepted accounting principles (GAAP) in the third quarter and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). And, importantly, the ongoing growth in adjusted free cash flow should help Carnival pay down debt.
Like Amazon, Carnival has seen its shares take off, climbing nearly 60% since the start of the year. But it's important to remember they're far from their pre-pandemic levels -- and at the same time, revenue is climbing.
Carnival's recovery efforts and the rebound in demand clearly could power earnings in the coming quarters -- and that may translate into a soaring stock price.
Should you really forget about Apple?
It's hard to forget about a company that seems to be everywhere these days, from your wrist to your TV screen. And there's reason to be optimistic about Apple's earnings and share price over the long haul. This market leader even looks reasonably priced today due to its bright long-term outlook.
So, I wouldn't avoid Apple shares. But if you want to stock up on stocks that may truly take off in the next bull market, Amazon and Carnival could be your best bets. Thanks to their recent recovery efforts, they have what it takes to lead the next wave of market gains.
