3 Unstoppable Growth Stocks to Buy in a Stock Market Liquidation

It’s no secret: the main stock indices have reached new highs. Investors are feeling optimistic about the recently concluded presidential election, amid reports of a healthy economy.

However, unexpected bad news could trigger a sudden massive sell-off. Investors should understand that such sell-offs are normal in the stock market. Rather than being surprised, you should take advantage of such scenarios to acquire solid growth stocks at low prices.

It’s worth remembering that the types of stocks you should target should at least have a strong business model and competitive advantage to help them hold their own against the competition. Ideally, these companies should grow revenue and profits and generate positive free cash flow. More importantly, these growth stocks must have catalysts that will help them show sustainable growth in the years to come.

Here are three stocks that are perfect candidates to buy during a stock market crash.

Image source: Getty images.

1.Oracle

Oracle (NYSE:ORCL) is a market leader in the provision of cloud infrastructure (Oracle Cloud). It also provides integrated application suites, hardware, and enterprise-related products and services, such as Oracle Database, a relational database management system.

The company has grown its revenue and bottom line as demand for artificial intelligence (AI) applications and cloud services has exploded. Total revenues rose from $42.4 billion in fiscal 2022 (ended May 31) to $53 billion in fiscal 2024. Net income soared nearly 56% in over the two years, going from $6.7 billion to $10.5 billion. Free cash flow also more than doubled from $5 billion to $11.8 billion during the same period.

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

Oracle’s remaining performance obligations totaled $99 billion, representing a strong 53% year-over-year increase and signaling increased activity at the company. 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 still has significant growth potential. At last year’s financial analyst meeting, management estimated that Oracle Cloud applications revenue opportunities exceed $115 billion, of which $88 billion represents additional new opportunities that can be captured.

Multicloud 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, while 14 are being built for Google. Oracle also recently signed an agreement with AmazonAmazon Web Services (AWS).

Oracle has also grown through choice acquisitions and not just organically. Last year, it purchased Next Technik, which provides field service management capabilities to NetSuite customers. In 2022, Oracle purchased Cerner, which deals with electronic health records, and the intellectual property of Newmetrix, which includes its suite of AI-based construction safety products.

2. Palo Alto Networks

Palo Alto Networks (NASDAQ:PANW) is a cybersecurity company that uses AI to detect threats and improve security effectiveness. In recent years, the number of mega breaches involving billions of dollars has increased. Additionally, public ransomware extortion activity has jumped more than 50% since 2022. These trends, along with the growing number of organizations digitalizing and migrating to the cloud, have created an urgent need for higher levels high levels of online security. Palo Alto Networks has taken advantage of these trends to steadily increase its revenue and net profit over the years.

Total revenue started at $5.5 billion in fiscal 2022 (ended July 31) and increased to $8 billion by fiscal 2024. The cybersecurity specialist has reported a net loss of $267 million in fiscal 2022 that turned into a net profit of $2.6 billion over the same period. . Without a $1.6 billion tax credit for fiscal 2024, pretax profit would still have been $988.3 million that year. The company has also seen its free cash flow generation improve over the years, from $1.8 billion in fiscal 2022 to $3.1 billion in fiscal 2024.

Palo Alto Networks still has a long runway for growth. According to Statista, the cybersecurity market is expected to grow at a compound annual growth rate of 7.9% to reach $271.9 billion by 2029.

The company’s numbers show good signs of this opportunity, with next-generation security annual recurring 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 large legacy organizations, like itself, will be more successful in leveraging AI than smaller start-ups. AI will also play a major role in 2025 and beyond, benefiting businesses, while businesses will be forced to adopt secure enterprise browsers to protect against malware and ransomware.

Palo Alto Networks has set a goal of approximately 90% of its revenue being recurring by fiscal 2030 and is confident of achieving further growth in customers and spend.

3. Arista Networks

Arista Networks (NYSE:ANET) is a leading provider of cloud networking and AI services to its customers. Like Oracle and Palo Alto Networks, Arista Networks has also enjoyed consistent revenue growth and growing net income over the years as demand for its products and services has increased. .

Revenue doubled from $2.9 billion in 2021 to $5.9 billion in 2023, while net profit soared nearly 105%, from $840 million to $2.1 billion. dollars over the same period. The company has also seen its free cash flow profile improve over time, from $951 million in 2021 to $2 billion in 2023.

Arista Networks saw this momentum continue through the first nine months of 2024 as its revenue climbed 17.4% year-over-year to $5.1 billion. Operating profit and net profit jumped 32.6% and 39.2%, respectively, to $2.1 billion and $2 billion. The company also generated positive free cash flow of $2.7 billion, up nearly 80% year-over-year.

The company is expected to benefit from good prospects with the release of new features for its CloudVision platform, which enables a modern network operating model for its customers. Its network-as-a-service model spans data centers, campuses and wide area networks, and helps simplify operations so organizations can save on operating expenses.

There is still a significant growth opportunity for Arista Networks as the cloud networking market is growing rapidly. The company’s total addressable market was $37 billion in 2023 and is expected to reach $60 billion by 2027.

Management outlined its vision for “Arista 2.0,” which includes three key pillars. These pillars involve investing in its core AI networking business, targeting adjacent markets such as Edge-as-a-Service and offering software-as-a-service capabilities by providing Zero Trust networks.

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

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