The stock market has dipped in and out of a series of favorable days in 2023. Still, the S&P 500 is up about 13% from this time one year ago. Investors who have stayed with the market through the highs and lows of the last five years would have witnessed a total return in the ballpark of 66%.
As a long-term investor, it doesn't matter what the market does in the next few weeks or months. If you have your eyes fixed on a long-term growth horizon -- which generally means a minimum buy-and-hold period of five years -- and you have spare cash that you won't need for bills or other financial obligations, now could be a great time to put some of it to work in more great stocks.
On that note, let's look at two companies to consider that could make you richer in December and well beyond.
1. Amazon
Amazon (AMZN 3.43%) has seen its fair share of difficult markets through the years. However, it still managed to deliver a total return of 660% over the trailing decade.
With its flagship e-commerce platform; market-leading cloud business; and other fruitful ventures into industries like groceries, healthcare, and artificial intelligence (AI), Amazon proved time and time again that short-term macro challenges are not a long-term hindrance.
In the recent quarter, net sales were $143 billion, with income of $10 billion. That top-line figure was up 13% from one year ago, while its bottom line more than tripled year over year. Sales from its flagship e-commerce platform accounted for $57 billion of that revenue total, up 6% from one year ago.
Its cloud segment, Amazon Web Services (AWS), had $23 billion in sales in the three-month stretch alone, a nice 12% bump from the same quarter in 2022. Although business growth is still muted compared to prior periods when the macro and spending environment was less constrained, the company's trailing 12-month operating cash flow jumped 81% to $72 billion.
The company is also continuing to make strides in generative AI. Examples include its expanding portfolio of custom AI-powered chips and its service for constructing AI applications called Amazon Bedrock.
Amazon's continuous innovation while steadily producing favorable growth from its core businesses should give investors a notion of its ability to stay competitive. An investment in this business still looks like a wise move, regardless of what the market does in the next several months.
2. Upstart
Upstart (UPST 2.76%), with a lending platform powered by AI and machine learning, has seen shares more than double since the start of this year, despite the fact that its financial growth has reversed considerably from where it was several quarters ago. While Upstart has been heavily shorted this year, there has also been progress in its business that seems to have garnered some renewed investor interest.
In fact, some on Wall Street think that the stock could present a 12-month upside of 38%. Analyst machinations aside, the stock still has a lot of potential despite the broader headwinds it continues to face as the lending market contends with ongoing macro challenges.
Revenue is still down from where it was a few years ago, and the company remains unprofitable. It makes most of its money from fees for referring, originating, and servicing loans. Consumers' appetite to apply for loans is down, and while the company did secure billions in outside funding earlier this year, institutional partners are still more hesitant to back loans than in prior periods.
On the flip side, 88% of loans that Upstart processes are automated with no human intervention. It has over 100 banks and credit unions as loan partners, compared to just 10 at the time of Upstart's initial public offering about three years ago.
Upstart brought in revenue of $135 million in the third quarter of 2023, about 108% higher than in the same quarter in 2020. Its revenue from fees totaled $147 million, a 2% increase on a sequential basis.
The company recently expanded into the $1.8-trillion home lending market, and CEO Dave Girouard said in the third-quarter earnings call, "More than 90% of [home equity lines of credit] are offered by banks and credit unions today, so it's a good fit with the Upstart platform and our partners."
Upstart's value proposition of basing loan approvals on over a thousand unique data points rather than Fair Isaac's FICO score alone still has disruptor potential by expanding the pool of potential consumers for lenders and the pool of potential capital for applicants. Investors might find that's a bet worth taking.
