2 unstoppable stocks to buy in the next market crash

“Stock market crash” is a phrase that no investor likes to hear, but it is a situation that you will have to deal with sooner or later. Going back to 1928, the S&P 500 has fallen by 10% or more on 54 different occasions, about once every 1.7 years. At first glance, that information may seem alarming, but consider the silver lining: Every downturn in the past has ended and the market has reached a new high.

In other words, each of those events was actually a buying opportunity. That is why it is important to have a plan: Keep some money in your wallet and know where to put that money in the event of a market crash. In general, I look for companies with a solid competitive position and good prospects for future growth – those traits often make a stock unstoppable in the long run.

Here are two ideas to get you started.

Image Source: Getty Images

1. Tesla

Tesla (NASDAQ: TSLA) is the leading manufacturer of electric vehicles (EVs). During the first eight months of 2021, the company had a market share of 13.3%. And despite significant supply chain headwinds, Tesla managed to produce 237,823 cars in the most recent quarter, an increase of 64% over the previous year. That’s impressive, but there’s a more important story under the hood; this company becomes one of the most efficient car manufacturers in the world.

In 2017, Tesla introduced the 2170 battery cell, which can store 50% more energy than the previous 1865 model. CEO Elon Musk even said it is the “highest energy density cell in the world, as well as the cheapest”. More importantly, this technology means Tesla will pay just $187 per kilowatt hour (kWh) for its battery packs, the most expensive part of an EV. That is 10% less than the closest competitor and 24% lower than the industry average.

In 2019, Tesla opened the Gigafactory Shanghai and produced the first Model 3 less than 10 months after launch. This helped locate the Chinese operations and cut costs by reducing the number of cars shipped across the ocean by boats. It also increased Tesla’s total production capacity, which now theoretically stands at 1.05 million EVs per year.

Together, these steps have helped Tesla reduce its cost per vehicle from $84,000 in 2017 to $38,000 in the first quarter of 2021. At the same time, the company delivered an industry-leading operating margin of 6.3% in 2020, rising to 14. .6% in the most recent quarter.

Not surprisingly, Tesla’s financial performance is impressive. In fact, the company has posted positive GAAP earnings for the past nine consecutive quarters and sales are growing rapidly.

Data source: Tesla SEC filings, YCharts. TTM: arrears-12 months. CAGR: Compound Annual Growth.

Looking ahead, investors can expect this momentum to continue. Tesla recently announced the 4680 Battery Cell, a new model that will cut costs by 56%, increase range by 54% and reduce capital expenditures by 69%. The company also plans to open two new factories later this year, further increasing production capacity.

Additionally, Tesla has established itself as a frontrunner in the race to build an autonomous vehicle. In fact, Musk believes the company will have a $25,000 fully autonomous EV on the market within three years. Once that happens, Tesla plans to launch an autonomous ride-sharing service, pioneering a market that values ​​Ark Invest at $1.2 trillion by 2030. And Morgan Stanley analyst Adam Jonas believes Tesla could launch a flying car company by 2050, addressing a potential $9 trillion market.

In short, Tesla is pushing the boundaries of modern technology. Therefore, I intend to expand my position during the next market crash.

2. Upstart Holdings

Upstart Holdings (NASDAQ: UPST) brings big data and artificial intelligence (AI) to the consumer credit industry. The software platform helps lenders such as banks and credit unions to more accurately quantify risks. In fact, management says Upstart’s AI models are four to eight times more accurate than traditional credit scoring, allowing lenders to approve nearly three times as many applicants while keeping loss rates constant.

To that end, Upstart’s business model creates a powerful network effect: more borrowers means more data, which translates into better AI models. And better AI models mean more approved loans (without compromising loss rates), which should bring more applicants to Upstart. This positive cycle has translated into accelerated growth for the fintech company.

Data source: Upstart SEC filings, YCharts. TTM: 12-month lagging CAGR: Compound Annual Growth.

Looking ahead, shareholders have plenty of reasons to be excited. Upstart recently expanded beyond the $84 billion personal loan industry and entered the $635 billion auto loan market. The company is now licensed to refinance auto loans in 47 states, and five banking partners have already used the platform for this purpose.

The bottom line: Upstart collects nearly 1,600 data points per loan applicant, far more than the 12 to 20 variables considered by a typical FICO scorecard. Over time, that benefit should snowball, improving consumer access to credit and boosting business for Upstart’s lenders. In addition, Upstart plans to bring its technology to other industries in the future, including credit cards, mortgages and student loans, to more broadly target the $4.2 trillion consumer loan sector.

Simply put, the company has a strong competitive position and significant market opportunity. That’s why I plan to buy these growth stocks during the next market crash.

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Trevor Jennewine owns shares of Tesla. The Motley Fool owns shares of and recommends Tesla and Upstart Holdings, Inc. at. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.