The smartest growth stock you can buy right now for $200

The current bull market began in October 2022, when investors began to see signs that the inflation crisis was easing. Some economic indicators suggest a sharp market correction is coming, but others suggest Wall Street will continue to rally for at least a year or two.

Market sentiment is red-hot right now. The Dow Jones Industrial Average (DJINDICES: ^DJI) increased by 18% in 2024 and the S&P 500 (SNPINDEX: ^GSPC) increased by 27% over the same period. As of December 9th, the tech-heavy one Nasdaq Composite (NASDAQINDEX: ^IXIC) The index is up 32%.

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So I understand if you’re worried about buying growth stocks right now. If bearish market indicators are correct, growth stocks could see major pain in the next correction.

But what if I showed you a growth stock that can weather any market storm and overcome the next challenge to deliver above-average returns on the other side? Whether we’re in the midst of a relentless bull market or on the cusp of a major market shift, it’s always a good time to buy stocks alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL). If you have the mentality of a long-term investor, any time could be the right time to put $200 – or any other amount – into an Alphabet investment.

Google parent Alphabet has many recession-proof features:

First, Alphabet has an ironclad balance sheet. It has $93.2 billion in cash reserves and short-term investments, but only $12.3 billion in long-term debt. The company could run its business at massive losses for many years without triggering a financial crisis.
The business is incredibly profitable. Alphabet generated free cash flow of $55.8 billion over the last four quarters based on revenue of $340 billion. This is quite a weak year for cash earnings as Alphabet invests billions of dollars in hardware for its artificial intelligence (AI) services.
The Google search engine and related businesses such as the Android mobile platform and the YouTube video service are remarkably resilient. Economic downturns such as the coronavirus pandemic, the recent inflation crisis and the collapse of subprime mortgages in 2008 have slowed them down, but have never turned off the engines of growth. And they were always ready to run again when the economy literally got back on its feet.
Google search accounted for 57% of Alphabet’s revenue in its most recent quarterly report, compared to 57% in the same period last year. The cloud computing platform known as Google Cloud is increasing its share of the company’s total revenue, capitalizing on the ongoing AI boom. In other words, Alphabet is diversifying its revenue streams before your eyes.
In the long term, this company is better prepared than most for radical market changes. If online ads go out of style, Alphabet could fill the gap with alternative ideas. The leading companies so far include self-driving taxi service Waymo and medical research arm Verily. The aforementioned Google Cloud operations generated 13% of Alphabet’s recent revenue, up from 11% in the same quarter of 2023. Alphabet can roll with the punches of the market.

The tech titan often shows robust performance on Wall Street when times are bad.

In the subprime mortgage crash of 2008, Alphabet stock crashed like everything else in the fall. It took time S&P 500 (SNPINDEX: ^GSPC) It took almost two years for Alphabet stock to get back to where it was, but Alphabet stock managed the same increase in half the time.

The S&P 500 moved sideways in 2015 due to low oil prices and concerns about the Chinese economy. Alphabet shares have gained 47% this year, fueled by an incredible second-quarter report. At a time of global economic concern, this company demonstrated fiscal restraint under the new Alphabet structure.

The Alphabet Group was founded to keep up with the times. When the next global (or pan-American) crisis pushes the economy in a completely new direction, Alphabet will surely find a way to stay relevant. If consumer tastes shift again into unexpected territory, one or more Alphabet subsidiaries should be on hand to meet the new needs. Lessons learned from economic downturns will then lead to stronger business for the next bull market.

This is not necessarily the safest investment in uncertain times, and the stock can actually suffer deep losses from time to time. But it’s one of the lowest-risk growth stocks on the market, and Alphabet promises excellent performance even in bull markets. Balancing the bull market’s limited threat and nice upside potential, it’s hard to beat this online powerhouse with big offline ambitions.

And that’s not all. A share of Alphabet costs less than $180 today, and the stock has underperformed the broader market in recent months. It trades at about 23 times trailing earnings or 6.4 times sales, which is a bargain compared to other high-growth tech stocks.

Long story short: Alphabet is a great buy if you want to invest $200 (or another amount if your broker supports buying fractional shares).

Before buying Alphabet shares, consider the following:

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Anders Bylund holds positions at Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.

The Smartest Growth Stock to Buy Now for $200 was originally published by The Motley Fool

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