Before you dig deeper into the stocks to buy for 2023, the path ahead is precarious. The Federal Reserve is continuing to hike rates, likely targeting a 5% terminal rate, which we could see in 2023. Moreover, the Fed aims to hold at this terminal rate for a long time, which could put interest rates above inflation. Combining that with the current economic climate, there is a good chance of a recession next year.

Conversely, many stocks are at record lows already, with little room for more decline. There are also companies that benefit from higher interest rates, such as banking companies. They could surge in 2023 regardless of a recession.

Furthermore, the stock market usually bottoms out six months before the economy does in a recession. Even under harsh economic conditions, undervalued stocks with solid fundamentals will likely surge in 2023. The following three are such stocks:

Visa (V)

Visa (NYSE:V) is one of the world’s largest credit card networks. With 3.9 billion Visa cards in use processing over 255.4 billion transactions, it is a safe bet for investors looking for long-term growth. Visa’s model is a platform-based business that easily turns sales into profits and consistently delivers high margins. Its net profit margin currently sits at over 50%, unheard of in 2022 due to margin compression.

Additionally, Visa has strategically acquired and partnered with various fintech companies, helping to protect its top spot in the credit card processing market. Moreover, the recent market downturn has only caused Visa’s stock to drop 6.6% year-to-date (YTD), making it an attractive buy for investors looking for more stability. Its five-year gain is also double that of the S&P 500.

Over the past three years, Visa has grown its EBITDA by 8.9% yearly and revenue by 10.7%. Visa’s dividend yields 0.87%, and the company has raised its dividends consecutively for the last 13 years. In addition, rising interest rates are improving profits for Visa, which is why V is one of the best stocks to buy for 2023.

Meta Platforms (META)

Meta Platforms (NASDAQ:META) might look like a counterintuitive market idea in this environment, which is why it is among the most overlooked stocks in 2022. Virtual reality and blockchain-related segments are far from the spotlight, and when they are a company’s main focus, they can quickly degrade the company’s value.

However, investors need to consider that Meta still owns Facebook, WhatsApp, Instagram and Messenger. The “Family of Apps” is still Meta’s cash cow and generates enough profits to keep its metaverse project afloat. Meta made $32 billion in operating profits from the “Family of Apps,” while it spent $9.4 billion on Reality Labs in the first nine months of 2022.

Even the Metaverse project could generate profits for Meta if virtual reality starts gaining popularity in the long run. Of course, it’s too early to tell if that will ever come true. But what is clear is that Meta should not be trading at an 11x price-to-earnings (P/E) ratio. Once ad revenue snaps back and growth returns, investors will pay a much higher premium for Meta stock.

Simply put, the metaverse is a cyclical segment, and buying at the bottom is a great idea. Meta is among the top stocks to buy before the market inevitably U-turns.

O’Reilly Automotive (ORLY)

O’Reilly Automotive (NASDAQ:ORLY) is up nearly 17% this year, and I expect the stock to surge even more in the coming years. As the economy deteriorates, fewer Americans are purchasing new cars. That might be bad for most car companies, but O’Reilly is an exception since its primary focus is car parts.

The U.S. civilian car fleet is aging rapidly, and the average car is 13.1 years old. It is hard to see the fleet getting younger anytime soon, as a new vehicle comes with many additional headaches, such as higher insurance costs. Thus, as fewer Americans replace their cars, auto parts retailers such as O’Reilly Automotive see profits rapidly increasing. I expect these profits to stay elevated through a recession, as getting your vehicle repaired is essential.

On the date of publication, Omor Ibne Ehsan did not have (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.