3 Unstoppable Growth Stocks to Buy If the Stock Market Sells Off

It’s no secret that major market indices are reaching new highs. Investors are optimistic about the recently concluded presidential election amid news of a healthy economy.

However, unexpected bad news can trigger a sharp and sudden sell-off. Investors should understand that such sell-offs in the stock market are normal. Instead of being surprised, you should take advantage of such scenarios to make handsome profits. growth stocks on the cheap.

It’s worth reiterating that the stock you’re looking to buy should at least have a strong business model and a competitive moat that can help protect it from the competition. Ideally, these businesses should grow their revenues and profits and generate positive free cash flow. Most importantly, these growth stocks must have catalysts that will help them deliver sustainable growth in the years ahead.

Here are three stocks that are ideal candidates to buy if the market crashes.

1. Oracle

Oracle (ORKL 0.98%) is the market leader in providing cloud infrastructure (Oracle Cloud). It also provides integrated application suites, hardware, and business-related products and services such as Oracle Database, a relational database management system.

The company grew its revenue and profit in tandem with rising demand for artificial intelligence (AI) applications and cloud services. Total revenue increased from $42.4 billion in fiscal 2022 (ended May 31) to $53 billion in fiscal 2024. Net income grew nearly 56% over two years, rising from $6.7 billion to $10.5 billion. Free cash flow also more than doubled from $5 billion to $11.8 billion over the same period.

Oracle’s strong financial performance continued in the first quarter of the current fiscal year 2025. Total revenue rose 7% year over year to $13.3 billion, and operating income jumped 21% year over year to $4 billion. Net income was $2.9 billion, up 21% year over year. The business continued to generate positive free cash flow of $5.1 billion in the quarter.

Oracle’s remaining performance obligations totaled $99 billion, representing a sharp 53% year-over-year increase and signaling the company’s expanding business. A quarterly dividend of $0.40 was also declared, providing investors with a passive income stream in addition to capital gains.

The company’s cloud segment continues to have significant growth potential. At last year’s financial analyst meeting, management estimated that potential revenue from Oracle Cloud applications exceeds $115 billion, of which $88 billion represents additional new capabilities that can be exploited.

Multi-cloud agreements signed with tech giants Microsoft and Google will help the company expand its cloud data center segment. Twenty-four Oracle Cloud regions are being built for Microsoft and 14 for Google. Oracle also recently signed an agreement with AmazonAmazon Web Services (AWS).

Oracle has also grown through selective acquisitions rather than just organically. Last year it bought Next Technik, which provides field service management capabilities to NetSuite customers. Back in 2022, Oracle acquired Cerner, which makes electronic health records, and the intellectual property of Newmetrix, which includes a suite of AI-enabled construction safety products.

2. Palo Alto Networks

Palo Alto Networks (PANV 1.25%) is a cybersecurity company that uses artificial intelligence to detect threats and improve security effectiveness. Over the past few years, there has been an increase in the number of large-scale violations, accounting for billions of dollars. Additionally, public extortion activity via ransomware has jumped more than 50% since 2022. These trends, along with the increasing number of organizations going digital and moving to the cloud, have created an urgent need to improve online security. Palo Alto Networks has taken advantage of these trends to steadily increase its revenue and bottom line over the years.

Total revenue started at $5.5 billion in fiscal year 2022 (ended July 31) and increased to $8 billion by fiscal year 2024. The cybersecurity specialist reported a net loss of $267 million in fiscal 2022, which turned into a net profit of $2.6 billion in the same period. . If we exclude the $1.6 billion tax credit in fiscal 2024, pre-tax earnings for that year would still be $988.3 million. The company also noted that free cash flow has increased over the years, from $1.8 billion in fiscal 2022 to $3.1 billion in fiscal 2024.

Palo Alto Networks still has a long path to growth. The cybersecurity market is projected to grow at an annual growth rate of 7.9% to reach $271.9 billion by 2029, according to Statista.

The company’s performance shows good signs of this opportunity, with annual next-generation security revenue growing 43% year over year to $4.2 billion. Remaining performance obligations increased 20% year over year to $12.7 billion.

Management believes that larger established organizations, such as itself, will have greater success in using AI compared to smaller startups. AI will also play a major role in 2025 and beyond, benefiting companies while businesses are forced to use secure enterprise browsers to protect against malware and ransomware.

Palo Alto Networks has set a goal of returning approximately 90% of its revenue by fiscal year 2030 and is confident of achieving continued customer and spending growth.

3. Arista Networks

Arista Networks (ANET 1.06%) is a leading provider of cloud and network artificial intelligence services for its clients. Like Oracle and Palo Alto Networks, Arista Networks has also seen consistent revenue growth and net profit growth over the years as demand for its products and services has grown.

Revenue doubled from $2.9 billion in 2021 to $5.9 billion in 2023, while net income grew nearly 105% from $840 million to $2.1 billion over the same period. The company also noted an improvement in its free cash flow profile, from $951 million in 2021 to $2 billion by 2023.

Arista Networks saw that momentum in the first nine months of 2024, as its revenue grew 17.4% year over year to $5.1 billion. Operating and net income rose 32.6% and 39.2%, respectively, to $2 .1 billion and $2 billion. The business also generated positive free cash flow of $2.7 billion, up nearly 80% year-over-year.

The company should be well positioned to release new capabilities for its CloudVision platform, which provides a modern networking model for its customers. Its network-as-a-service model spans data centers, campuses and wide area networks and helps streamline operations so organizations can save on operational costs.

Arista Networks still has significant growth opportunities as the cloud networking market grows rapidly. The company’s total addressable market was $37 billion in 2023 and is projected to grow to $60 billion by 2027.

Management outlined its vision for Arista 2.0, which includes three key areas. These pillars include investing in the core business of AI networks, targeting adjacent markets such as edge-as-a-service, and offering software-as-a-service capabilities by building zero trust networks.

With a clearly defined long-term strategy and tailwinds at its back, Arista Networks should continue to generate growing revenues and profits for many years to come.