Among the many main inventory indexes, the tech-heavy Nasdaq Composite has been hit the toughest, down 24% year-to-date. However even the most secure blue-chips have fallen, as demonstrated by the 12% dip within the Dow Jones Industrial Common.

These market downturns might be irritating, however the returns that comply with a bear market virtually make the expertise value it, particularly in the event you’re a good distance off from retirement.

The fastest-growing firms will normally ship the sharpest rebounds as soon as the markets backside out. Reminiscence chip maker Micron Know-how (MU 0.54%) and cloud information supplier Snowflake (SNOW 0.53%) are two of my favourite progress shares to purchase proper now. This is why these shares might be nice matches for a well-diversified portfolio.

Micron Know-how

Micron is likely one of the largest suppliers of dynamic random-access reminiscence (DRAM) modules and solid-state storage drives, that are extensively utilized in client PCs, smartphones, and information facilities. The inventory has fallen 32% this 12 months on issues of a worldwide slowdown throughout the semiconductor trade. Micron reported income progress of 16% year-over-year in the newest quarter, however administration expects income to say no roughly 13% year-over-year within the subsequent quarter.  

The slowing progress matches the historic sample of the boom-and-bust cycles within the semiconductor trade. However even with the swings in demand, the inventory has doubled since 2017, and will double once more. 

The explosion of knowledge and the rising connectivity between units are the elemental elements driving up Micron’s income. International information creation since 2010 has grown from 1 trillion gigabytes to 81 trillion gigabytes. This drives demand for reminiscence and storage capability, as seen in Micron’s cumulative income progress of practically 300% over the past decade. 

MU information by YCharts

New use instances for Micron’s merchandise, together with electrical autos, 5G infrastructure, synthetic intelligence, and cloud computing, require extra chips per unit, which ought to proceed to drive income up. 

These markets even have longer demand cycles than client merchandise, which ought to assist clean out the boom-and-bust cycles over time. By fiscal 2025, Micron expects most of its income to return from the info heart, automotive, industrial, and graphics markets. 

It is not possible to know when the inventory will flip round, however Micron must be a extra priceless enterprise in 5 years than it’s immediately.

Snowflake

Regardless of buying and selling at a excessive price-to-sales a number of of 32, this cloud inventory gives large long-term upside. Snowflake gives organizations a single platform to retailer and question information. It mainly helps firms untether their information from legacy methods and transfer it over to the cloud, which permits extra versatile entry to information from completely different sources, together with the power to share information between organizations. 

The cloud market has remained very resilient in 2022, regardless of weakening financial developments. Enterprise spending on cloud infrastructure providers grew 34% year-over-year within the first quarter. 

Sturdy demand for cloud providers will also be seen in Snowflake’s newest numbers. Income elevated 84% year-over-year within the first quarter. Administration expects income to develop one other 71% to 73% year-over-year within the second quarter. 

Most significantly, Snowflake is beginning to see progress on the highest line translate to bettering profitability. Free money circulate was detrimental over a 12 months in the past, nevertheless it now totals $226 million on trailing-12-month foundation.

SNOW Free Money Move information by YCharts

Rising free money circulate ought to fund Snowflake’s innovation for purchasers. It just lately introduced a number of new enhancements to the Snowflake Information Cloud, together with a brand new cybersecurity workload and new options for the Snowflake Market that enable firms to share and alternate information. 

Snowflake has a sterling steadiness sheet, with $5 billion in money and investments and no debt. Administration expects income to develop at a compound annual fee of 30% over the following seven years, with free money circulate climbing to $2.5 billion, or 25% of whole income.   

The inventory does not look low cost, nevertheless it’s fallen 60% from its highs. The corporate’s strong progress and bettering free money circulate will probably push the inventory a lot larger within the subsequent bull market.