Prediction: You'll Regret Not Buying These 2 Industry-Leading Stocks During the Nasdaq Sell-Off

With fears of a trade war and a potential economic recession rising, the Nasdaq Composite has fallen into correction territory, retreating more than 10% from its mid-December high. With this decline, a number of quality stocks have fallen to attractive entry points.

Two stocks that stand out are Meta Platforms (NASDAQ: META) and Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). The companies are the largest digital advertising companies in the world. While a weakened economy would hurt their advertising revenue in the short term, I'm not worried. Both companies have dominant positions in their respective fields, and their leading performance-based digital marketing platforms are places where advertisers tend to allocate more of their money when budgets get tight given their proven effectiveness.

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Let's look at why these two stocks are currently great long-term buys.

Meta Platforms

Meta is the second-largest digital advertising platform in the world, but it has been gaining market share. The company owns a variety of social media and messaging app platforms headlined by Facebook and Instagram.

The company has leaned into artificial intelligence (AI) with its Llama model. This is helping lead to increased user engagement, with people spending more time on its platforms, as well as helping better connect advertisers with consumers. This can be seen in the company's strong numbers last quarter, when it grew its revenue by 21%, with ad impressions increasing by 6% while its average price per ad jumped by 14%.

Meanwhile, Meta has a big opportunity with its newest social media platform, Threads. One thing the company has always been good at is developing new social media platforms, growing their user bases, and then later monetizing these platforms through advertising. Meta is currently growing out the Threads audience, with 320 million monthly active users at year-end. Meanwhile, it's been growing its user base by about 1 million users a day.

Once Threads goes into its monetization phase, this should be a strong growth driver for Meta. What the company does better than any other social media company is make money from its users base, especially in international markets. This can be seen in the large gap between its global average revenue per user (ARPU) and that of its competitors. For example, last quarter Snap's global ARPU was $3.44 while Pinterest's was $2.12. That was a fraction of Meta's $14.25.

Alphabet

While Meta has been gaining share recently, Alphabet's Google search engine is still the largest digital media advertising platform in the universe. Meanwhile, its YouTube video streaming platform by itself is the fourth largest. Since advertisers pay Google to display their ads when users are searching for specific related information and the company gets paid on a per-click basis, its search advertising tends to be very results oriented and thus pretty resilient even during periods of economic slowdowns.

Like Meta, Alphabet is also leaning heavily into AI with its Gemini model. It is using Gemini to help return better search results as well as create AI overviews to quickly answer users' questions. AI overviews could be a big opportunity for the company to monetize down the line with new ad formats. Given its largely pay-per-click model, Google generally only serves ads on about 20% of its queries, so ads in AI overviews would be an untapped realm to expand into.

The company also has a stand-alone Gemini app that competes with the likes of ChatGPT and Anthropic's Claude. While a bit behind, it's been catching up rapidly with its latest Gemini 2.0 version, and it is pouring money into the space. Its long history of search data should eventually help give it a leg up. Meanwhile, its Veo 2 text-to-video AI engine looks to be a strong leader in this emerging use of AI. Its superior performance is a result of its being trained on YouTube videos.

In addition to its ad-supported businesses, Alphabet also owns a fast-growing cloud computing business. The company is using Gemini as a foundation model to help customers build out and customize their own AI models and applications. The business is currently capacity constrained, so it is investing heavily to build new data centers to meet demand.

Investors also get two promising emerging technology businesses with Alphabet. The company recently made a big breakthrough in quantum computing with its Willow chip, where it was able to reduce errors while scaling up. Meanwhile, its Waymo robotaxi business has taken the lead in the space, with it being the only company to offer paid rides in the U.S. It still needs to reduce the costs of its autonomous driving technology, but it is beginning to expand to other U.S. cities and even internationally to Tokyo.

Image source: Getty Images.

Two great stocks for the long term

Both Meta and Alphabet are down about 20% from their recent highs, as of this writing. While largely based on advertising, both companies have strong, market-leading businesses and a lot of growth opportunities. Now's a great time to buy shares for the long term.

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*Stock Advisor returns as of March 10, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet and Pinterest. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and Pinterest. The Motley Fool has a disclosure policy.