Whether the product of genuine market forces or psychology, the September Effect — the tendency for September to be, on average, the worst month of the year for the market — can have a very real impact. Couple that with mounting fears of a recession, and things get even more uncertain for investors as the summer reaches a close.

Investors looking to mitigate the potential negative effects of September trading should keep in mind that market volatility is natural and expected and that sudden or rash moves may only make things worse.

While no stock is a sure thing, Vertiv Holdings Co. (NYSE: VRT), Mondelez International (NASDAQ: MDLZ), and e.l.f. Beauty (NYSE: ELF) may offer some stability during a period of potential market tumult.

Organic Sales Growth Fuels Vertiv Guidance Increase

Even if September is volatile for markets, it's a good bet that AI hype will remain steady. The AI market has ballooned by more than a third to $184 billion in the last year, and forecasts suggest growth could continue at roughly the same pace through 2025.

Vertiv, a company specializing in data centers and digital infrastructure and services, stands to gain from the growing interest in AI technologies. The company topped analyst expectations for the second quarter of the year with net sales of $2 billion and operating profit of $336 million, an increase of 13% and 63% year-over-year, respectively.

CEO Giordano Albertazzi cited "increased scaling of AI deployment" and Vertiv's unique position connecting IT and facilities in data centers as drivers.

AI interest has translated into real increases in demand for Vertiv's services, as second-quarter organic orders climbed by 57% year-over-year and 37% on a trailing 12-month basis. The firm signaled its belief that this will continue throughout the rest of the year by raising sales and operating profit guidance to $7.7 billion and $1.3 billion at the midpoint, respectively.

Analysts are bullish on Vertiv. Based on nine analyst ratings, the company has an average price target of $96.22 and an upside potential of over 26%.

Mondelez Boosted Dividend Amid Efficiency Project

With a market capitalization of more than $94 billion, Mondelez is a titan of the food and beverage business. The firm has a broad reach across the Americas, Europe and Asia. What's more, executives are guiding the company to reduce inefficiencies while simultaneously offering an attractive dividend prospect for investors.

Mondelez reported 1.9% and 34.8% declines year-over-year, respectively, in net revenues and diluted earnings per share in the second quarter. These figures are somewhat misleading, though, as they reflect both unfavorable currency-related items and the impact of the firm's 2023 sell-off of its gum business. For example, adjusted EPS was up 25% year-over-year on a constant currency basis. The company's free cash flow remained strong at $1.5 billion.

Efficiency is key for an operation as large as Mondelez. The firm plans to dedicate $1.2 billion to a large-scale enterprise resource planning and supply chain operations overhaul through 2028.

In the latest quarterly report, Mondelez announced an 11% boost to its dividend as a sign that it expects the project to be a success and to avoid disruptions.

Opportunity to Buy on the Dip for e.l.f. Beauty?

e.l.f. Beauty stands out among cosmetics companies for its budget-friendly pricing, which is especially helpful if the economy slips into a recession. Investors may have a unique opportunity to bulk up on e.l.f. shares at a bargain, as the company's share price surprisingly slipped by 20% in the last five days following a strong earnings report for the fiscal first quarter.

From April to June, e.l.f. logged net sales of $324.5 million, 50% higher than the prior-year quarter. Surging sales are always good, particularly for a company with a gross margin of 71%. Net sales growth for e.l.f. is driven by improvements in in-person retail and e-commerce and an increase in market share of 260 basis points. The company has managed to carve out a section of the competitive cosmetics space through its strong brand and affordable prices compared to many legacy firms.

As e.l.f. continues to expand to new retail channels, it is well-positioned for either an economic downturn or a scenario in which the FOMC cuts rates next month. It's no surprise, then, that analysts have set an average price target of $216.43, representing an upside potential of more than 45%.

Though the September Effect could put a damper on investments in the coming weeks, some firms are in a better position than others to emerge unscathed or even up. Weighting your investments toward defensive plays like consumer staples stocks is an approach that may be helpful.