Nasdaq Enters Correction: Opportunities in Leading Tech Stocks

It has happened: the Nasdaq has transitioned into correction territory. As of the market close on March 10, the Nasdaq Composite index was down over 9% year to date and roughly 13% from its peak on December 16. While this correction might not be a complete surprise, it is still unsettling to see several major stocks and indexes in the red.

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^IXIC data by YCharts.

Despite the current correction, there are still positive aspects to consider. This downturn offers potential opportunities to buy some of the stock market’s top companies at a relative discount. Two Nasdaq stocks that have seen declines this year but still represent strong investment potential for the next decade and beyond are discussed below.

1. Amazon

As of March 10, Amazon‘s (NASDAQ: AMZN) shares were down 11% for the year. Importantly, this drop does not stem from any fundamental issues within Amazon’s business model.

For long-term investments, I prioritize companies with diverse business models. While Amazon’s e-commerce segment remains significant, its cloud platform, Amazon Web Services (AWS), and its emerging advertising business provide strong growth potential

Amazon’s international operations have shown promising improvements as well. In 2023, the international segment posted a $2.7 billion operating loss. However, it rebounded in 2024, achieving an operating income of $3.8 billion, indicating progress in global market operations.

AWS continues to be a critical growth driver for Amazon. As it secures enterprise contracts, the growth momentum is likely to persist. Notably, AWS has recently partnered with major enterprises such as PayPal, Intuit, and Reddit.

The cloud computing market is set to expand as businesses increasingly adopt cloud technologies. AWS’s position as a leader in this space is expected to remain strong, especially as Amazon allocated a large portion of its $83 billion in capital expenditures for 2024 to AWS growth, with plans for a similar investment of $100 billion in 2025.

This reinvestment in critical growth areas is essential for Amazon’s long-term prospects.

AMZN Capital Expenditures (Annual) data by YCharts.

2. Microsoft

Microsoft (NASDAQ: MSFT) is a tech giant that has navigated various market conditions for decades. By March 10, its stock was down about 10% year to date, and nearly 19% from its July 2024 peak.

Microsoft exemplifies a diversified business in the tech landscape, encompassing enterprise and consumer software, hardware, cloud services, gaming, and social media. More than that, its integration into vital corporate operations bolsters its long-term success and financial stability.

During the second quarter of its fiscal year 2025 (ending January 31), Microsoft reported $69.6 billion in revenue, a 12% year-over-year increase, and operating income of $31.7 billion, up 17% from the previous year. These figures highlight the company’s resilience, given its size.

MSFT Revenue (Quarterly) data by YCharts.

Microsoft’s extensive clientele offers a safety net during economic downturns, as its products are essential in various business operations. Companies might reduce their marketing budgets, but they are less likely to forgo cloud services or software subscriptions.

When investing for the long term, selecting a company with a positive trajectory, such as Microsoft, is prudent. Its crucial role in corporate infrastructure, a rapidly growing cloud sector, and $71.5 billion in cash reserves provide a robust buffer against future challenges.

Although Microsoft stocks have traditionally been seen as expensive, recent price drops create an opportunity for investors to acquire shares in one of the industry’s leading companies.

Don’t Miss This Opportunity for Investment Growth

Feeling like you’ve missed out on investing in successful stocks? Consider this news.

Sometimes, our expert analysts issue a “Double Down” Stock recommendation for companies poised for growth. If you believe you’ve lost your chance to invest, now is the time to consider buying before potential gains slip away.

• Nvidia: Invest $1,000 when we doubled down in 2009, and you’d have $277,401!
• Apple: Invest $1,000 when we doubled down in 2008, and you’d have $43,128!
• Netflix: Invest $1,000 when we doubled down in 2004, and you’d have $467,393!

We are currently issuing “Double Down” alerts for three exciting companies, and chances like this often don’t last long.

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*Stock Advisor returns as of March 10, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Stefon Walters has positions in Microsoft. The Motley Fool has positions in and recommends Amazon, Intuit, Microsoft, and PayPal. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, long January 2027 $42.50 calls on PayPal, short January 2026 $405 calls on Microsoft, and short March 2025 $85 calls on PayPal. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.