3 Unstoppable Growth Stocks to Buy if There's a Stock Market Sell-Off

The stock market has been on a nice run of late. At the time of this writing, the S&P 500 has gained 7% over the past month while the Nasdaq Composite has risen by 8%. While it's always great to see green in your brokerage account, with higher prices come higher valuations. Paying too much for even a great growth stock can significantly cut into investor returns.

However, it is inevitable that the market will eventually turn and stocks will fall. That can be difficult to endure, but it will also provide buying opportunities for the best businesses in the world. Let's take a look at three growth companies with stocks to buy if there's a sell-off in the market.

Nvidia

Semiconductor chip developer Nvidia (NVDA 6.18%) has been in the news lately for very good reasons. Driven by the rush into artificial intelligence (AI), Nvidia has seen mind-boggling results in the last two quarters. Consider the year-over-year revenue growth and net income over the latest two quarters of its fiscal 2024 (ended Oct. 29, 2023).

Data source: Nvidia.

Management expects this trend to continue at least for another quarter. Fourth-quarter 2024 revenue is projected to be $20 billion. That would represent a 231% increase over Q4 2023. The majority of this growth has been in Nvidia's data center business and it's because of the interest in chips that can help with artificial intelligence.

Even if the AI revolution is upon us, it's unlikely Nvidia will see this level of growth over the long term. As one might expect, the valuation of Nvidia shares is a reflection of the recent results. Nvidia currently trades for 115 times trailing earnings. Compare that to the S&P 500's price-to-earnings (P/E) ratio of 25 and it's clear that investors may be better off waiting for the stock to pull back before buying shares.

Apple

Apple (AAPL -0.35%) is a great company and still is likely to show periods of growth ahead, but the current valuation suggests it may be best to wait before buying shares. Apple is trading for a P/E multiple of 31, which is well above the market average. What makes that more concerning from the standpoint of potential returns is that the results over the last few quarters are showing signs of slowing momentum.

In the most recently reported fiscal quarter, revenue growth declined by 1% year over year. This was the fourth consecutive quarter with a decline in year-over-year revenue growth. Both revenue and free cash flow have been trending down over the last year.

AAPL Free Cash Flow (Quarterly) data by YCharts

There's every chance that this is a temporary lull in Apple's growth story. However, the current valuation doesn't match the results. There's a chance that Apple's growth reaccelerates from here, rewarding shareholders who buy today. However, the more likely scenario is that results from today's valuation could be disappointing. Waiting for a market sell-off seems prudent.

ASML

To put it simply, there's no way to build the most high-tech semiconductor chips without ASML (ASML 2.04%). This Dutch company makes the machines necessary for Extreme Ultraviolet Lithography (EUV), which is an essential part of the production of chips, and it's the only company in the world that does so.

Without looking at results, one might guess ASML is struggling considering the semiconductor industry is in a cyclical down cycle. Luckily, ASML has a strong backlog to rely on. As of the end of the third quarter of 2023, ASML had a backlog of 38 billion Euros. There is more demand for ASML's machines than it can accommodate, which is helping bridge the gap while the market is working through the bottom of its cycle.

ASML currently trades for 35 times earnings and 46 times free cash flow. These multiples are both right around the historical average for the company but are still expensive. While investors could still see an investment from here do well, it couldn't hurt to wait for a market sell-off to add more shares.