3 Tech Stocks That Will Lead The Market Rebound

© Courtesy of The Motley Fool 3. Tech stocks that will lead the market recovery

Investors in technology stocks suffered from tough market conditions last year. The performance of the first two months of 2023 could shed light on the end of the bear market tunnel, but patience will probably be needed.

It also requires finding attractive companies that offer competitive advantages, strong leadership and sustainable growth. Regardless of how long the next extended bull market takes, here are three such stocks you can add to your portfolio until then.

1.Shopify

Shopify's (NYSE:SHOP) typically strong financial results have taken a nosedive of late, but the story of growth is far from over. The company is operating at a net loss, but revenues are growing strongly, and the investments you're making now in your business should keep you competitive in an increasingly competitive e-commerce environment.

Management said Shopify will capture 10% of the US ecommerce market by the end of 2022, a market worth $905 billion in 2022 and $1.7 trillion by 2027. Statistical Analysts. Meanwhile, Shopify's $197 billion in total sales are not only up 12% from 2021, but more than triple their 2019 numbers.

Management has made it clear that greening Shopify's bottom line again is a top priority. Chairman Harley Finkelstein said on its fourth quarter 2022 earnings call, “If you look at our seven years since the IPO, we've been profitable five out of seven years. We like to make profits and we will work on it."

Meanwhile, Shopify continues to introduce new tools and solutions to help merchants thrive, from ecommerce provider Deliverr's seamless integration with the Shopify Fulfillment network to its recently launched all-in-one mobile POS. Choose the Shopify Markets Pro cross-border solution. This investment can pay for the business many times over in the future in the form of profits which allows Shopify to continue to gain market share and retain more merchants. Shopify's continued progress in this challenging ecommerce environment bodes well for its future, and investors who see the stock rise could see big gains.

2.Fiverr

Fiverr (NYSE: FVRR) continues to expand its platform. The sharing economy is widely used both by workers who want to supplement their income and by those who want to replace the income of a full-time job. The difficult macroeconomic situation affects businesses across all sectors, including Fiverr. This increases the money spent on the platform, but also affects margins.

However, revenue acceleration is strong, active customer engagement continues, and Fiverr's purchase rate is steadily increasing. These are all good signs that even as the challenging economic environment impacts the spending trajectory of shoppers on the Fiverr platform for the foreseeable future, the company is laying a solid foundation for continued long-term growth. In 2022, Fiverr generated $337 million in revenue, an increase of 13% over 2021. At the same time, active shoppers and active spend per shopper increased by 1% and 8%, respectively.

Fiverr continues to increase the retention rate with each subsequent quarter. In the 4th quarter compared to the same period of the previous year it was 30.2%, an increase of 100 basis points. The company still posted a net loss of $71.5 million for the year, but its GAAP net loss narrowed to just $1.3 million in the fourth quarter.

According to a recent McKinsey study, the self-employed make up 36% of the U.S. workforce, and this segment of the workforce will only grow, even if spending continues in the near term. This is a channel that can lift all long-range ships, including Fiverr.

3. Airbnbs

Airbnb (NASDAQ: ABNB) has remained a benchmark in the travel industry for the past several years, largely due to the wide variety of offerings its platform offers today to nearly every type of traveler. It also benefits from serving two distinct aspects of the overall tourism economy.

Consumers can book through Airbnb, from casual vacationers to business travelers to digital nomads, for anything from a few nights to months. Owners can earn a second income or even a full income by renting out their property on the platform.

Airbnb reports that demand for hosting increased dramatically in the fourth quarter of 2022 as the tough economy prompted more people to try hosting to supplement their income. By the end of the year, Airbnb had 6.6 million active listings on its platform, up 16% from the end of 2021. In the first six months of 2022 alone, hosts earned $21 billion on the platform Airbnb.

Airbnb's appeal for both hosts and travelers won't go away. Even in a downturn, the catalysts that bring more hosts and travelers to the Airbnb platform can continue through a downturn and beyond. The platform will take advantage of the popularity of short-term travel (which has grown again as the pandemic has subsided), as well as the new reality that more people can take their work to their computers and set up shop wherever they want. . . weeks or months.

It is at this point that revenues and profits increase, as does cash generation. This creates a strong foundation from which Airbnb can weather any short-term economic or market storm.

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Rachel Warren holds positions at Shopify. The Motley Fool has classifieds and recommends Airbnb, Fiverr International and Shopify. The Motley Fool has a disclosure policy.

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