The past few years have been a trial for many of us. It started with the pandemic which led to global supply chain issues and then high inflation. Having dealt with high interest rates, lower consumer spending and global economic concerns, it finally feels like the economy is improving. Inflation is cooling, and we could see improved consumer spending this month going into the holiday season.
However, economists haven’t completely ruled out the possibility of a recession and this means investors need to tread carefully. When building a portfolio, investors need to look for companies that can thrive in any market situation. It isn’t easy to find bulletproof stocks that can withstand a tumultuous market, but here are three safe stocks that should continue to perform well regardless of general economic conditions.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) is one of the titans of the tech industry having been around longer than most other companies in the space. Among all the stable stocks, Microsoft stands out as an outsized winner. It has a market cap of $2.74 trillion, and MSFT stock is up 54% year-to-date (YTD), trading at $369 today.
The company has invested in Artificial Intelligence (AI) which is a huge catalyst for increased profitability. It has invested $13 billion in OpenAI and is infusing AI across different products and services. Microsoft will start to benefit from AI in early 2024, and revenue is expected to soar.
Its cloud segment is another winner that contributes significantly to its revenue. It saw a 24% growth year-over-year (YOY) in the recent quarter up to $31.8 billion. The company’s total revenue came in at $56.5 billion and its earnings per share (EPS) was $2.99. It saw an operating income of $27 billion, up 25% YOY. The company believes in rewarding shareholders and has a dividend yield of 0.81%. It has enough cash flow to keep paying and even increasing dividends in the coming quarters.
Additionally, Microsoft recently completed the much-talked-about Activision Blizzard merger which has been called the biggest merger in the history of gaming. While the negotiation of that deal was a long winding road for the company, it now gives Microsoft an edge in the gaming space. It has reduced competition in the industry and will continue to attract gamers to its Xbox Game Pass subscription service.
Microsoft believes in innovation and doesn’t sit back and watch while its competitors progress. As a result, MSFT is one of the bulletproof stocks that has been steadily moving upward for the past five years. Holding this stock for the long-term will certainly pay off.
Alphabet (GOOG, GOOGL)
Valued at $1.62 trillion, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is one of the most valuable companies in the world. It’s hard to imagine life without its products which makes it another one of the great bulletproof stocks to own right now. Alphabet owns some of the biggest brands people use in their daily lives and is one company that will never go out of business. It has a massive user base and a strong global presence.
Alphabet saw an improvement in its ad business in 2023, and since that makes up the majority of the company’s revenue, it is expected to grow in 2024. With easing inflation and higher spending on marketing, Alphabet could report strong ad revenue in the next quarter.
In Q3, it reported a revenue growth of 11% YOY with an increase to $77 billion. EPS was $1.55. During Q3, advertising revenue was $59.65 billion and this number is expected to grow. The company generated $78 billion in free cash flow in the past four quarters and has a long-term debt of only $13.8 billion.
Like Microsoft, Alphabet will benefit from the growing use and adoption of AI. It is launching the large-language model Gemini in 2024 and this platform will compete against GPT-4 which could boost Alphabet’s business. Alphabet already has a solid user base, a large market share, the right products and enough cash to keep investing in innovation and research.
Trading at $129 today, the stock is highly undervalued and could see a massive upside in 2024. Although it is up 45% YTD, it still has a long way to go. The business might see ups and downs but it can thrive in any market situation making Alphabet one of the best safe stocks to own.
Amazon (AMZN)
E-commerce giant Amazon (NASDAQ:AMZN) has come a long way from selling books online to selling pretty much everything today. The global giant holds a solid market share and is expanding its offering with each passing year making it one of the top bulletproof stocks for withstanding market volatility.
Besides offering a wide range of products, it also has Amazon Web Services (AWS) and streaming services which both continue to generate revenue for the business. It will start selling vehicles online next year. Black Friday sales and the upcoming holiday season will benefit the company in the coming weeks, and we could see it report a stronger quarter than expected.
No matter where the market moves from here, Amazon is going to continue growing. Its financial resources make it one of the top safe stocks to invest in. In the third quarter of this year, it saw a 13% YOY rise in sales overall and a 12% rise in revenue just in AWS. Its operating income hit $11.2 billion, and the advertising segment saw a 26% YOY revenue increase to hit $12 billion.
Exchanging hands for $145 today, the stock is up 68% YTD. AMZN is one of the most stable stocks right now and one solid reason to invest in it is the company’s diversification. With a streaming business, digital advertising, cloud computing and online shopping, Amazon has it all, making it another one of the top three bulletproof stocks to invest in this year.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.