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The Nasdaq Composite ( ^IXIC 0.29% ) slipped briefly into a bear market last week, falling more than 20% from its high back in November. Fear that the sky was falling sent many investors running for cover, which is understandable given the recent market turmoil and wild volatility. Historically speaking, however, now is the best time to be looking for best-in-breed stocks to add to your portfolio because each downturn is inevitably followed by a new bull market rally.

I’m not just dispensing idle advice, either. Just last week, I put my own hard-earned money to work in five companies with three things in common: an industry-leading position, significant secular tailwinds, and a large addressable market. A $100,000 investment spread equally among these five innovative stocks could grow to $1 million by 2035.

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1. The Trade Desk

High atop my buy list is the undisputed industry leader in programmatic advertising, The Trade Desk ( TTD 4.45% ). The company uses high-speed computers fueled by sophisticated algorithms to automate the ad-buying process, and its data-driven technology targets consumers most likely to act on those ads. Furthermore, its cutting-edge solutions led to The Trade Desk being named a Leader in the Gartner Magic Quadrant for Ad Tech. 

The tech-centric market slump sent shares into a tailspin, but the business is firing on all cylinders (if you’ll excuse the cliché). The stock has shed roughly 39% of its value as of this writing, but a look under the hood shows why the company is a steal at this price.

The Trade Desk closed out last year with a bang, with 2021 revenue that grew 43%, while its adjusted net income climbed 36%. This robust growth came even in the face of heavy investment, as The Trade Desk rolled out its latest state-of-the-art Solimar ad-buying platform. Furthermore, its Unified ID 2.0 technology has been adopted by a broad coalition of advertisers and is quickly becoming the industry standard to replace ad-tracking cookies.

The company generated revenue of roughly $1.2 billion last year, which is a drop in the bucket compared to its massive opportunity. The global ad industry clocked in at $766 billion last year and is expected to surpass $1 trillion by 2025. 

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2. HubSpot

From its humble beginnings as an inbound marketing specialist, HubSpot ( HUBS 3.37% ) has grown its software-as-a-service (SaaS) platform into a full-service customer relationship management (CRM) platform. The company is still top-notch when it comes to marketing, as it was cited by Gartner’s Magic Quadrant as a Leader for Business-to-Business (B2B) Marketing Automation Platforms.  

But HubSpot has evolved into so much more. The company continues to expand its ecosystem, with forays into marketing, sales, service support, payments, content management, and operations solutions. Yet even as its business and opportunity have grown, the recent market sell-off has punished HubSpot, driving its shares down more than 44% even as its business has prospered.

Last year, HubSpot continued its robust growth, with revenue that climbed 47%, while its adjusted net income surged 55%. The company’s customer base of 135,000 grew 30% year over year, and more than 60% of the company’s customers have adopted multiple hubs, driving its net revenue retention rate above 110% for the year.

The company generated revenue of roughly $1.3 billion last year, which pales in comparison to its growing total addressable market, which one analyst estimates at roughly $87 billion. 

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3. MongoDB

The changing face of data has largely cast aside the legacy database, as the need to store and index information goes far beyond traditional rows and columns. This includes entire documents, photos, social media posts, video and audio files, and more. MongoDB‘s ( MDB 2.45% ) cloud-native platform helps users pull and store data from a host of non-traditional sources, with a free-to-use offering that acts as a stepping-stone to introduce prospective customers to its fully managed paid services.

The company was recognized as an overall leader in cloud database providers by KuppingerCole, one of Europe’s leading technology analyst firms. Furthermore, MongoDB has been consistently cited as the database most wanted by developers, according to research by Stack Overflow. 

Yet, as tech stocks have taken it on the chin, MongoDB followed suit. Its shares have been down roughly 30%, with no company-centric news driving the decline. The company’s robust financial results suggest this situation is temporary.

MongoDB closed out last year in fine fashion. For fiscal 2022 (ended Jan. 31), revenue climbed 48%, while the company slashed its adjusted loss by two-thirds as it edged closer to profitability. Not only did its customer base climb 33%, but existing customers spent more, with a net revenue expansion rate above 120%. 

This could be just the beginning. MongoDB operates in one of the largest and fastest-growing markets in the industry, with an estimated total addressable market that’s expected to top $97 billion by 2023. Considering MongoDB generated revenue of just $874 million in fiscal 2022, it has a long runway for growth ahead. 

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4. Twilio

While most consumers have never heard of Twilio ( TWLO 2.85% ), many of them use its services every day. The company’s in-app communication tools are the industry-standard, named the Communications Platform-as-a-Service (CPaaS) leader by IDC MarketScape in 2021. 

Twilio provides app developers with the tools they need to connect with their users. These systems provide the framework that allows customers to reach out to businesses via text, chat, video, phone, and more without ever having to leave the app. It also underpins things like password resets and status updates for ride-hailing, grocery delivery, and restaurant orders.

The recent tech stock sell-off has dragged the stock down nearly 60%, but its financial results illustrate why it’s a bargain at these prices. 

Twilio’s revenue grew 61% in 2021, though it isn’t yet profitable as it scrambles to grab market share. Its customer base climbed to 256,000, up 16%, while its dollar-based net expansion rate of 131% shows that existing customers are ramping up spending.

The company generated revenue of $2.84 billion in 2021, which is a drop in the ocean compared to Twilio’s total addressable market, which management estimates at $79 billion. This helps to illustrate the significant opportunity that remains.

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5. Roku

Streaming pioneer Roku ( ROKU 0.23% ) has become the favored platform among viewers to manage the growing number of subscription and ad-supported over-the-top services they frequent. In late 2020, Roku’s user base surpassed that of Amazon‘s Fire TV and never looked back. The Roku operating system, licensed by a growing number of connected-TV manufacturers, continues to maintain its lead, accounting for more than 1-in-3 smart TVs sold in the U.S. last year. 

Yet difficult comps and supply chain disruptions have taken a toll, weighing on forecasts and unit TV sales, resulting in tepid account growth. Fear that these issues will become permanent has punished Roku’s stock, which has plummeted more than 70% from its highs last year, but there are reasons to be bullish.

Roku’s revenue surged 55% in 2021, while its platform revenue — which includes digital advertising, The Roku Channel, and its OS licensing — soared 80%. At the same time, the company turned a tidy profit for the year, reversing the loss it incurred in 2020.  

Growth in active accounts and streaming hours slowed in the fourth quarter, up 17% and 15%, respectively, weighed down by tough pandemic-related comps and a return to normal leisure activities. That didn’t stop Roku from being the No. 1 television streaming platform in the U.S., Canada, and Mexico, in terms of hours streamed. Viewer numbers should normalize in the coming months as comps and supply chain constraints ease.

It’s still early days for the streaming pioneer. Roku generated revenue of roughly $2.76 billion last year, but that pales in comparison to its market opportunity, which is expected to climb to nearly $224 billion by 2028.  

TTD PS Ratio Chart

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The fine print

A bear market is a great time to boost the long-term performance of your portfolio by buying quality stocks while they’re on sale. That’s not to call a bottom or say the market won’t fall further (it could). 

It’s worth noting that none of these stocks is cheap in terms of traditional valuation metrics, selling for between 6 and 30 times sales when a “good” price to sales ratio is between 1 and 2. That said, each of these stocks possesses a rare trifecta of an industry-leading position, strong secular tailwinds, and a significant addressable market, which — when combined — could generate explosive gains.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.