Stock market crashes aren't all that unusual. During your lifetime, you're likely to experience quite a few of them. But multiple major stock market crashes in the same year are practically unheard of.
Just because something hasn't happened in the past doesn't mean it can't happen, though. After the massive market meltdown in the spring and the subsequent strong rebound, some investors are wary that if there's a year when two market crashes will occur, it'll be 2020.
As has been the case with previous steep market declines, a potential second plunge this year would present a fantastic buying opportunity for long-term investors. If a “stock market crash 2.0” is on the way, here are three stocks that you'll absolutely, positively want to buy.
Fastly (NYSE:FSLY) has been a huge winner in 2020, with the tech stock more than quadrupling year to date. But it's also priced at a nosebleed level, with shares trading at more than 35 times sales. If there's another market crash in the near future, Fastly is likely to sink like a brick.
The company specializes in content delivery networks (CDNs) and edge computing. CDNs are distributed platforms of servers that reduce the physical distance between the servers and users. Edge computing moves processing closer to the point where corporate networks connect with the cloud (the cloud's “edge”). With both technologies, the goal is to increase the speed of delivering apps and data across the internet.
The increasing popularity of e-commerce, online gaming, and video streaming has fueled growth for CDNs and edge computing. Fastly's focus on making the relatively new technologies easy for developers to incorporate has made the company the fastest-growing player in these niche markets.
I think that investors should seriously consider rushing in to scoop up shares of Fastly if the stock becomes available at a significantly lower price. The long-term opportunities for the company are simply too great to ignore.
2. Intuitive Surgical
Intuitive Surgical (NASDAQ:ISRG) lost more than 40% of its market cap at one point during the market sell-off earlier this year. Since then, though, the robotic surgical systems maker has been on a tear, with shares nearly doubling.
Some investors might be reluctant to buy Intuitive Surgical now that the stock is trading at more than 53 times expected earnings. There are also concerns that a worsening COVID-19 pandemic this fall could lead to more surgical procedure delays like those that occurred during the previous pandemic-related lockdowns.
These worries would probably make Intuitive Surgical a prime candidate to sink if a “stock market crash 2.0” happens, but you can bet that any decline would be only temporary. I consider Intuitive Surgical to be a practically invincible stock over the long run.
The company's existing customers have a strong financial motivation to maximize their return on investment with their robotic surgical systems. This translates to solid growth in the consumables sales that generate more than 70% of Intuitive's total revenue. Demographic aging trends and technological innovation that expands robotic surgery applications should also fuel Intuitive's long-term growth.
3. Vertex Pharmaceuticals
There aren't too many stocks that I'd say are virtually guaranteed to enjoy strong growth over the next few years. Vertex Pharmaceuticals (NASDAQ:VRTX) is one of them.
The biotech recently won European approval for its latest cystic fibrosis (CF) drug, Kaftrio (which is marketed as Trikafta in the U.S.) This new CF therapy has already become Vertex's biggest moneymaker in its first two full quarters on the market in the U.S. Kaftrio will be a surefire winner in European markets as well — mainly because it has no competition. None at all.
It's quite possible that the biotech stock could fall during an overall stock market crash. That's what happened earlier this year. However, any underlying negatives with the economy or the COVID-19 pandemic are unlikely to significantly impact Vertex's business.
What about Vertex's longer-term prospects after Trikafta/Kaftrio reach peak sales? The company has other promising pipeline candidates in phase 2 testing. These include a couple of experimental drugs that target alpha-1 antitrypsin deficiency, a rare genetic disease that could present an even greater market opportunity than CF.
Keith Speights owns shares of Fastly, Intuitive Surgical, and Vertex Pharmaceuticals. The Motley Fool owns shares of and recommends Fastly and Intuitive Surgical. The Motley Fool recommends Vertex Pharmaceuticals and recommends the following options: long January 2022 $580 calls on Intuitive Surgical and short January 2022 $600 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.