Nasdaq Sell-Off: 2 Pullback Stocks to Buy and Hold for a Decade

After a sharp rise the past few years, the stock market has had a rocky start to 2025. Concerns that President Donald Trump's tariff policies could send the economy into a recession have extended the declines for the major market indexes over the last few weeks.

The tech-centric Nasdaq Composite (NASDAQINDEX: ^IXIC) has fallen more than 10% year to date at the time of writing.

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A market sell-off can be unsettling, but also work to your advantage. Warren Buffett got rich taking advantage of periods when strong companies are underestimated, which often comes during a broad market sell-off. And the sharp rise following the previous two market crashes at the onset of the pandemic in March 2020 and again in 2022 shows how profitable it can be to buy stocks when pessimism is at its peak.

Here are two reasonably priced growth stocks to buy now and hold for the long term.

1. Nvidia

Nvidia (NASDAQ: NVDA) is the leading supplier of chips used in data centers for artificial intelligence (AI), but concerns over the potential for slower data center spending in 2025 has sent its share price down 20% year to date. However, investors can take advantage of the dip and buy shares at an attractive valuation. The stock has delivered phenomenal returns over the last five years and has more to offer patient shareholders.

A slow economy in the near term is not going to stop the long-term growth in the AI market. This is why Dell'Oro Group says capital spending in data centers could exceed $1 trillion by 2029. Data center operators are making major investments to prepare for the day when every piece of software is powered by AI.

Nvidia's revenue doubled last year to $130 billion, with 88% of it coming from sales to data centers. Although it's still unclear what impact tariffs will have on Nvidia's business in the near term, it's the long-term spending increase on new chips that will make Nvidia a larger and more valuable business in the next decade than it is today.

Importantly, Nvidia is not just selling chips, or graphics processing units (GPUs). It offers a complete end-to-end system of hardware (GPUs) and software to help AI researchers develop models as efficiently as possible. This is a key reason why Nvidia has such a dominant lead in the data center space.

The recent dip has brought Nvidia's price-to-earnings (P/E) multiple down to 24 using this year's consensus earnings estimate. For perspective, the average stock in the S&P 500 is trading at a 28 P/E on trailing earnings. Nvidia offers comparably good value right now that sets investors up for excellent gains in the coming years.

2. Amazon

Another top stock worth buying on the dip is Amazon (NASDAQ: AMZN). Its wide selection of goods and convent ordering has won over 200 million Prime members that pay membership fees for free shipping and other perks. Amazon's lead in a $4 trillion e-commerce market is a good reason to invest in the stock, but an even better reason is the long-term growth opportunity in Amazon's cloud computing business.

If every software application is using AI one day, that is going to lead to tremendous growth for leading cloud service providers, including the leader, Amazon Web Services (AWS). The insatiable demand for AI services in the cloud accelerated its growth in 2024, with revenue from AWS up 19% year-over-year in the fourth quarter.

With AWS generating $115 billion in annualized revenue, it's a major profit driver, contributing half of Amazon's total operating profit. AWS may not deliver strong growth every year, as a recession could weigh on near-term corporate budgets -- if one develops -- but spending on cloud services will certainly be higher in 10 years than it is today, which will benefit the stock.

Cost reduction efforts in the retail business and the high-margin revenue from AWS has made Amazon a significantly more profitable business over the past few years. This is evidenced by its booming operating cash flow, which soared 36% to $116 billion last year.

The growth in Amazon's cash flow is undervalued. The stock currently trades at 18 times trailing cash from operations per share, which is below its previous five-year average multiple of 25. Amazon shares offer solid value for long-term investors at their current price.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.