1 Unstoppable Growth Stock That Could Soar if a Bear Market Is Coming

The stock market has experienced significant volatility this year, as geopolitical tensions in the Middle East, rising inflation, concerns about potential interest rate hikes, and elevated valuations have set investors on edge. As a result, the S&P 500 is down 3% from its recent record high at recent prices, while the Nasdaq-100 is down by 9%.

But some companies benefit from heightened volatility, and Interactive Brokers (NASDAQ: IBKR), which operates the world's largest digital platform for investing in stocks, options, futures, cryptocurrency, and more, is one of them. It just reported stellar operating results for the second quarter of 2026 (ended June 30), showing a sharp acceleration in revenue growth.

With major catalysts like U.S. midterm congressional elections coming up in November, the stock market is likely to remain somewhat unsettled. But even if the indexes extend their recent declines to 20%, which would constitute a technical bear market, here's why I think Interactive stock will still trend higher.

Image source: Getty Images.

Trading activity exploded during the second quarter

Interactive Brokers earns a commission whenever its clients buy or sell a stock, options contract, futures contract, or cryptocurrency, so periods of heightened trading activity are typically great for its business.

The company processed 4.82 million daily average revenue trades during the second quarter, which was up by a brisk 34% from the year-ago period. That growth rate marked a sharp acceleration from 24% in the first quarter, just three months earlier, so it appears investors were aggressively repositioning their portfolios amid all of the market uncertainty.

Interactive also ended the second quarter with a record 5.19 million client accounts, which was up 30% from the same time last year. Large swings in the financial markets often grab news headlines, which attracts new investors who might have been waiting on the sidelines for an opportunity to buy stocks.

It appears those investors still feel very comfortable taking on risk, because Interactive's clients were holding $108.5 billion in margin loans as of June 30, which was up by an eye-popping 67% year over year. Investors usually borrow money to buy stocks and other financial securities when they feel supremely confident that the market is going higher. Whether they are right remains to be seen, but in the meantime, Interactive will earn interest on that enormous loan balance.

Revenue growth just accelerated sharply

Interactive's total revenue climbed by 28% year over year to $1.9 billion during the second quarter. Growth accelerated from 17% in the first quarter, so this is another metric that highlights the company's incredible momentum.

There were two primary components to Interactive's second-quarter revenue:

1. Commission revenue, which rose by 30% to $673 million.
2. Net interest revenue, which rose by 23% to $1.06 billion. This represents the interest Interactive earns on margin loans, client cash balances, and its own corporate cash.

The company's commission revenue will continue growing quickly if stock market volatility remains elevated, but its net interest revenue could also receive a boost if the Federal Reserve raises interest rates. Fed Chairman Kevin Warsh says rate hikes might be necessary to tame the recent spike in inflation, and the CME Group's FedWatch tool is now pointing to two potential hikes before 2026 is over.

This will allow Interactive to charge clients a higher interest rate on their margin loans, and it will also increase deposit rates, so the company will earn more on its cash balances.

Interactive stock looks attractive on a forward basis

Interactive generated earnings of $0.69 per share during the second quarter, which was a 35% jump from the year-ago period. Its trailing-12-month earnings now amount to $2.51 per share, placing its stock at a price-to-earnings (P/E) ratio of 36.7. It isn't necessarily cheap considering the Nasdaq-100 index has a P/E ratio of 33.1, but I'm not surprised investors are willing to pay a premium given the accelerating growth in many of the company's core operating metrics.

Wall Street thinks Interactive could grow its earnings to $3.17 per share in 2027 (according to Yahoo! Finance), placing its stock at a forward P/E ratio of 29.1. In other words, investors who are willing to hold Interactive stock for at least the next 18 months might actually be paying an attractive price for it today.

Plus, Wall Street's forward earnings estimate might prove too conservative if the company continues to process record transaction volume, and also if interest rates remain elevated into next year.

Interactive stock has returned 37% so far in 2026, and I think it's poised to continue performing well even if the broader market slips into bear territory.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CME Group and Interactive Brokers Group. The Motley Fool recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group and short January 2027 $46.25 calls on Interactive Brokers Group. The Motley Fool has a disclosure policy.