Finding reliable growth stocks isn't so easy in today's market. The trade war has injected a high level of uncertainty in the stock market, and valuations were already high leading up to the recent pullback.
No one knows what will happen with tariffs, or if the economy will slide into a recession, but there are some stocks built to withstand this kind of economic pressure. They have qualities like exposure to international markets and a business that doesn't rely on discretionary spending, which make them resilient in the current market.
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Keep reading to see two such stocks that can deliver long-term outperformance and even help you make a fortune.
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1. Axon Enterprise
Axon Enterprise (NASDAQ: AXON) is a leader in law enforcement technology. It makes Taser electrical weapons, as well as body and dashboard cameras, and it also has a software division that focuses on managing things like evidence and records for law enforcement agencies.
Axon has built a strong business from a niche area of technology, and the company finished 2024 with $2.1 billion in revenue, up 33% from the year before. It also has a long track record of success on the stock market, as the stock is up nearly 2,000% over the last decade.
The company has been successful thanks to a strong product lineup and several complementarities in its business model. For example, the Taser business operates with a razor-and-blades style model, as customers need to buy cartridges to use with the weapons. Its software is built to work with the data collected with its body cameras, and its strength in both hardware and software makes it a valuable partner for law enforcement agencies, as it covers so many of their tech needs.
Finally, the company is also innovating around its competitive advantages. Its new generative AI product Draft One takes footage collected by its cameras and makes first drafts of police reports, saving valuable time for police officers, and showing a unique way of using artificial intelligence (AI) technology.
Looking ahead, Axon has a number of opportunities for growth. One is in the private sector, as it signed its biggest contract ever last year with a logistics company, showing interest in body cameras for frontline workers in areas like package delivery. It also has grown its drone first responder business after acquiring Dedrone. That program enables autonomous drones to arrive on the scene in one to two minutes, communicating valuable information and making intervention easier.
Axon's history of innovation and network of complementary products make it a good bet for continued growth, and the company should benefit during the current volatility from selling to state and local governments, which should be more predictable than individual consumers or others threatened by tariffs.
2. MercadoLibre
Like Axon, MercadoLibre (NASDAQ: MELI) has also been a longtime winner on the stock market, returning 1,520% over the last decade.
The company has built a wide-moat e-commerce empire in Latin America thanks to a combination of services like its e-commerce marketplace, digital payment and fintech services under MercadoPago, a delivery service in MercadoEnvios, and other complementary businesses. These include MercadoCredito, its credit arm, and an asset management business called MercadoFondo, an asset management business. MercadoLibre has also leveraged its e-commerce platform to build an advertising business, following in the footsteps of Amazon.
MercadoLibre operates primarily in three countries: Brazil, where roughly half of its revenue comes from; Argentina; and Mexico. The company benefits from operating in a region where e-commerce and digital payment adoption is still relatively low compared to the U.S. As a result, MercadoLibre has enjoyed a strong growth tailwind, even as other e-commerce companies have struggled to grow post-pandemic, and it also has a long runway of growth ahead of it as it expands to other countries in Latin America.
The e-commerce company just finished a year with 37% revenue growth to $20.8 billion, and its gross merchandise volume (GMV), or the total value of goods sold on its platform, topped $50 billion for the first time. Operating margin also topped 13% for the year, showing profitability has significantly improved as well.
Additionally, the company has fended off competition from Amazon and Sea Limited's Shopee, showing it can withstand competitors entering the market.
Overall, MercadoLibre has the international exposure that's attractive in today's market, and a long growth runway ahead, making it a good bet to continue outperforming the market.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Amazon, Axon Enterprise, and MercadoLibre. The Motley Fool has positions in and recommends Amazon, Axon Enterprise, MercadoLibre, and Sea Limited. The Motley Fool has a disclosure policy.
