Market Correction: 3 Top Tech Stocks to Buy on the Dip

The recent market correction has brought on significant investor pain. With the market suffering the worst one-day drop since 2022 on March 10, buying may be the last thing some investors want to do.

Nonetheless, the market has rebounded from every previous downturn in history and will almost certainly recoup the losses from this one at some point. Knowing that, investors should look at what stocks they might want to buy amid the correction.

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Now that many tech stocks are on sale, three Fool.com contributors have ideas on what stocks could recover from this downturn and elevate investor returns.

For those willing to ride out the volatility, this could be an excellent time to load up on shares of Reddit

Jake Lerch (Reddit): Things can change fast on the stock market. Take Reddit (NYSE: RDDT), for example. One month ago, the company's stock was hitting new all-time highs as shares were trading for more than $220. As of this writing, Reddit shares have plummeted by more than 42%.

Yet, I remain bullish on the company's stock. Here's why.

First of all, investors need to gain some perspective. Reddit hasn't even been a public company for an entire year. The company's stock debuted via an initial public offering (IPO) on March 21, 2024. Since then, shares are up 159%. And that's after the shares took a nosedive. At its peak, shares were up more than 347% from their IPO level.

RDDT data by YCharts

While this most recent drop is nerve-wracking, the stock is still likely to register a triple-digit return in its first year, which, needless to say, is very impressive. Indeed, Reddit remains one of the best-performing growth stocks over the last 12 months -- even if its most recent performance is alarming.

The second reason I remain bullish on Reddit is simple: The recent stock market volatility doesn't undercut my reason to own it. I'm bullish on Reddit because the company has a large and fast-growing user base and easy ways to monetize those consumers. As of its most recent quarter (ended Dec. 31, 2024), Reddit had nearly 102 million daily average users, which represented an increase of 39% from a year ago. Similarly, revenue (mostly from advertising) grew by 71% year over year to $428 million.

Crucially, Reddit's business is not particularly sensitive to the concerns that are giving the stock market heartburn. Higher tariffs aren't likely to impact the company's business model. The recent pullback is a buying opportunity for long-term investors.

An AI-driven focus may be game-changing for this data cloud company

Will Healy (Snowflake): Snowflake (NYSE: SNOW) may finally be ready for its long-awaited recovery. It stood out for its leadership in the data cloud, with a platform that allows customers to store data while managing and deploying the data for analysis without risk of it being compromised or siloed.

The potential for this technology took Snowflake's shares to a record-high closing price of $390 soon after its IPO in 2020. However, the 2022 bear market hit the stock hard, and just when it began a recovery in 2023, the sudden resignation of CEO Frank Slootman in early 2024 inspired another sell-off.

Current CEO Sridhar Ramaswamy took the helm, and his AI background has allowed Snowflake to build on its platform Cortex AI, which it launched in late 2023. Cortex allows Snowflake customers to plug data into large language models safely, making it a critical AI company.

Despite the correction in recent weeks, Ramaswamy's AI focus has helped boost the company's stock since he took the helm a little more than one year ago, and its financials indicate the recent decline is a hiccup rather than an indication of a longer-term problem. In fiscal 2025 (ended Jan. 31), revenue of $3.6 billion was a 29% increase from year-ago levels.

High operating expenses, pushed higher by almost $1.5 billion in stock-based compensation, continue to weigh on Snowflake's financials, leading to a $1.3 billion net loss. Also, product revenue forecasts call for a 24% yearly increase in fiscal 2026, which would represent a growth slowdown.

Still, adjusted free cash flow for fiscal 2025 was $942 million, meaning non-cash expenses, not operational expenses, have caused Snowflake's net loss. Moreover, its price-to-sales (P/S) ratio has fallen to 14, a near record low for the stock.

Considering that valuation and the AI-driven technology of Snowflake's data cloud, investors could easily regret not buying shares during the market correction.

Apple's 2.35 billion iOS devices make the stock a no-brainer for AI's next stage

Justin Pope (Apple): Artificial intelligence is steadily entering its next phase. While AI hyperscalers continue to spend billions of dollars on chips and other hardware, the focus may soon shift to AI platforms and applications that bring the technology to consumers and businesses. I think Apple (NASDAQ: AAPL) will be a massive long-term winner here.

The company is famous for its sticky ecosystem, which includes the iPhone, wearable accessories, tablets, and computers. Thanks to software that seamlessly ties everything together, the user experience is buttery smooth. As of earlier this year, Apple had approximately 2.35 billion active iOS devices worldwide. Its massive footprint gives the company an inside track to capture market share in consumer-facing AI.

You've already seen the earliest iteration of Apple Intelligence, a package of generative AI features Apple introduced through software updates in its newest devices. Thus far, Apple Intelligence has reportedly failed to make a great first impression with iOS users. However, it's incredibly early. A full roll-out will take several years as iOS users upgrade to AI-capable devices, allowing Apple to experiment and improve Apple Intelligence.

The stock trades at a price-to-earnings ratio over 31, which some may argue is expensive for a company trying to reignite growth. However, assuming Apple succeeds in AI, the stock should be fine over the long term. Analysts estimate Apple will grow earnings by an average of almost 14% annually over the next three to five years.

Unless a competitor emerges that eats into Apple's vast user base, it seems appropriate to give the company the benefit of the doubt. Apple remains a world-class company that generated nearly $100 billion in free cash flow over the past four quarters alone. Until proven otherwise, Apple is on top of the consumer mountain, making it the most obvious consumer-facing AI stock you can comfortably buy and hold for the next five to 10 years.

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Jake Lerch has positions in Reddit and has the following options: long March 2025 $210 calls on Reddit, long March 2025 $210 puts on Reddit, short March 2025 $195 puts on Reddit, and short March 2025 $220 calls on Reddit. Justin Pope has no position in any of the stocks mentioned. Will Healy has positions in Snowflake. The Motley Fool has positions in and recommends Apple and Snowflake. The Motley Fool has a disclosure policy.