Thinking About Buying Growth Stocks During the 2025 Nasdaq Bear Market? Consider These Risks First.

Bear markets person historically been phenomenal times to enactment hard-earned savings to enactment successful the market, but lone for businesses that person the qualities indispensable to endure a prolonged slowdown. Here are immoderate risks worthy considering earlier diving headfirst into buying the dip, and wherefore Meta Platforms (NASDAQ: META) passes the hazard test.

Bear markets tin hap for a assortment of reasons -- specified arsenic valuation concerns, economical slowdowns, and recessions. In this case, the large hazard is that tariffs volition pb to higher costs, little demand, little spending, and a imaginable recession.

Companies that make precocious escaped currency travel (FCF) with beardown nett margins are good positioned to endure a play of higher tariffs. Meta is simply a cleanable example.

Meta's household of apps, which includes Instagram, Facebook, and WhatsApp, relies connected advertisement revenue. Ad gross is high-margin due to the fact that Meta has fewer operating costs too paying employees and managing its platforms.

The societal media elephantine is ramping up superior expenditures to enactment its artificial quality (AI) efforts. It is besides deploying sizeable superior toward probe and improvement for its Reality Labs division, which handles augmented world and virtual world products similar Meta Quest. But these investments aren't indispensable for supporting the halfway business.

The institution has galore levers it tin propulsion to make tons of FCF, adjacent during a recession. It tin trim superior expenditures and Reality Labs spending. From a superior instrumentality perspective, it could besides propulsion backmost connected banal repurchases.

In 2024, Meta generated a staggering $54.1 cardinal successful FCF connected a gross of $164.5 billion. The institution returned the bulk of that FCF to shareholders -- including done $30.1 cardinal successful buybacks. And Meta began paying a humble dividend past year.

All told, Meta is raking successful the FCF adjacent arsenic it loses wealth connected its Reality Labs conception -- a testament to the profitability of its household of apps and Instagram's growth.

Another hazard worthy considering earlier buying maturation stocks during a carnivore marketplace is fiscal health. If a company's superior operation depends connected debt, making involvement payments and managing that indebtedness volition go much hard if profits fall.