Preparing for a Market Crash? Put This AI Technology Stock on Your Watchlist Right Now.

Investing in growth stocks means you need a strong stomach. Volatility is the price of admission for owning huge winners, and investors should expect drawdowns every so often from even the best stocks in their portfolios. Broad market weakness can also present headwinds. Few stocks did well during the 2008 market crash, the spring of 2020, or in 2022 when the market indexes tumbled.

The market indexes are beginning to creep back to all-time highs when it comes to valuation. If you are worried about an impending market crash hurting your portfolio, then I have the perfect technology stock: Coupang (NYSE: CPNG). Here's why the international stock is a good buy today and one to keep on the watchlist if a market crash brings havoc to technology stocks in the near future.

Coupang's durable e-commerce business

Even though Coupang is listed and headquartered in the United States, its e-commerce business is centered in South Korea. The e-commerce player has built up a robust delivery network that powers spending for its Rocket Wow subscription members. Customers can receive orders in as little as a few hours or overnight by 7 a.m. the next morning. Top-notch service includes the installation of appliances ordered online or fresh grocery delivery included for people who pay its Prime-like subscription fee.

Since Coupang's business is focused on South Korea, it would likely be hurt less by any economic recession in the United States or a stock market crash that brings about a slowdown of consumer spending. Globalization means that economies like the United States and South Korea are interconnected, but Coupang's business would be less hurt than other U.S. technology or internet stocks that are tied to consumer spending in America.

Plus, Coupang's e-commerce business relies on e-commerce purchases for durable goods, such as groceries or everyday necessities. This will help it stay resilient through all economic environments as compared to a consumer discretionary company.

A reasonable valuation for a fast-growing technology player

Unlike other technology and artificial intelligence (AI) companies, Coupang is not trading at a huge valuation premium. This not only makes it a good stock to buy today, but one to watch out for if any broad stock market weakness brings down the share price.

At a market cap of $59 billion, Coupang does not look cheap compared to its trailing net income of $340 million. However, with revenue of $32 billion that is growing 19% year over year, I think the stock is cheap, considering what the business could be generating in net income a few years from now. Management is guiding for long-term profit margins to approach 10% or higher. Using that 10% level, Coupang has the capacity to generate $5 billion in net income on $50 billion in revenue. That $50 billion in revenue is well within reach if it keeps expanding its e-commerce operations.

That's not counting Coupang's expansion into Taiwan, acquisition of the Farfetch fashion marketplace, or its new cloud computing division focused on AI. A $59 billion market cap vs. $5 billion in net income is a price-to-earnings ratio (P/E) of just 11.8. Coupang can get to this P/E ratio within a few years, making it a cheap stock to buy today if you plan to hold for the long haul. If the stock market crashes and brings Coupang down with it, the stock will be even cheaper to buy on any dips.

CPNG Revenue (TTM) data by YCharts

Should you bet on Coupang for a market crash?

Market crashes can strike fear, panic, and other emotional responses from investors. Sensationalized financial media does not help with this issue. The broad stock market indexes will fall at some point in the future, as they tend to go into bear markets a couple of times each decade. 50% drawdowns are rarer, but do happen and should be expected at least a few times in an investor's life.

Coupang should do better than most stocks if stocks crash in the United States, and it would be a perfect stock to buy on any dips, given that it is already cheap today. However, investors should not buy Coupang because they're banking on a market crash happening tomorrow. Market crashes are guaranteed to happen at some point, but trying to time them is a fool's errand.

You can buy Coupang to build a resilient portfolio for all market environments. Just take a longer view and invest with your gaze on the next decade, not whether the market will crash next week, next month, or next year. That will help you sleep better at night and lead to better investment returns.

Brett Schafer has positions in Coupang. The Motley Fool recommends Coupang. The Motley Fool has a disclosure policy.