The stock market has taken significant hits recently, with the tech-heavy Nasdaq Composite experiencing severe fluctuations, dropping nearly 13% over the last three weeks. Investors have become increasingly cautious following the downturn, particularly after the S&P 500 recorded its ninth-largest single-session decline on Monday, March 10, 2025, losing 728 points.
Such volatility is nothing new, but it does remind investors of the risks inherent in the stock market. Indeed, the Nasdaq Composite, once among market leaders, has seen about a 9% decrease year-to-date, prompting many to wonder what this means for future investments. Yet, history suggests downturns can often present unique opportunities for savvy investors willing to weather the storm.
Among the casualties of this market correction, several growth stocks are turning heads as potential buys. Analysts have pinpointed three companies worth considering: The Trade Desk, Alphabet, and Intuitive Surgical. Each has faced challenges recently, but their long-term outlooks remain promising.
The Trade Desk, which specializes in digital advertising, has seen its stock plummet by 57% since reaching all-time highs during the fourth quarter. This decline is partly due to the company's fourth-quarter performance, which, though marking 22% sales growth, fell short of forecasts by approximately $17 million.
Adding to investor concerns, the Federal Reserve Bank of Atlanta predicts a 2.4% contraction of the U.S. economy this quarter. The advertising sector is particularly sensitive to economic shifts, prompting businesses to trim ad spending at the slightest hint of economic trouble. Despite these headwinds, The Trade Desk's position as a demand-side digital ad platform remains strong. The company's Unified ID 2.0 technology is gaining traction, allowing it to target audiences effectively across connected TV platforms, making it more relevant as media consumption habits evolve.
Similarly, Alphabet has not escaped the storm. The parent company of Google and YouTube experienced its stock slump amid fears of tighter regulations on big tech firms, particularly with the U.S. Department of Justice considering breaking up portions of the company. Despite these uncertainties, Alphabet posted fourth-quarter sales amounting to $96.5 billion, 75% of which originated from advertising. This dependence means any downturns could hit their bottom line hard.
Nevertheless, Alphabet has demonstrated resilience over the past decade, maintaining significant market share of global internet searches, which positions it favorably for recovery during economic upswings. The company's cloud service, Google Cloud, is also expected to be a major growth driver, possessing 11% of the global cloud market share as per Canalys estimates.
Another key player, Intuitive Surgical, has seen its stock decline nearly 21% due to the market correction. The company is known for its robotic-assisted surgical systems, namely the da Vinci system. Factors impacting its stock include the high valuation, previous trading at approximately 90 P/E ratio, and market participant concerns over tariffs imposed by President Trump on imports from Mexico, which could affect Intuitive Surgical's profit margins.
Despite these challenges, the company's long-term potential appears solid. Intuitive Surgical is grabbing more market share and increasing margins through its revenue streams beyond just system sales, including instrument sales and servicing. Their strategy could facilitate sustainable growth moving forward.
Investing during downturns may sound counterintuitive; still, historical trends reveal maintaining or investing during market lulls often yields significant long-term rewards. For example, investors who weathered the Great Recession saw their investments nearly double within ten years. Similarly, those who committed to the S&P 500 at the onset of the dot-com bubble eventually reaped substantial rewards after holding through the subsequent market corrections.
Even recent market performance confirms this principle. Investors who placed bets on the S&P 500 index fund early in January 2022 would have enjoyed total returns close to 17% as of today, March 13, 2025. This serves as evidence of the market's tendency to rebound over time.
Dollar-cost averaging also remains a compelling strategy to minimize risks associated with market volatility. By spreading investments over time, investors can capitalize on lower prices without the stress of pinpointing precise buying moments.
While the current adverse market conditions may seem alarming, steadfast investors could likely see favorable outcomes if they stick with it. Historically, markets recover from downturns, and the focus during turbulent times should shift from immediate losses to long-term growth potential.
Investors should not shy away from the idea of buying stocks such as The Trade Desk, Alphabet, and Intuitive Surgical during this correction phase, as their underlying businesses show promise for recovery and growth. Timing the market is nearly impossible, yet consistently investing and maintaining our positions is the best path toward potential significant returns.