The Smartest Stocks to Buy With $1,000 in the Nasdaq Correction

There are several ways to approach a market correction. One would be to resort to panic selling, which is usually a bad idea. Alternatively, investors can take the opportunity to buy shares of top companies on the dip. That's the right move for those focused on the long game.

The tech-heavy Nasdaq Composite recently experienced a correction. It climbed out of it, but many stocks are still down by quite a bit and are worth buying and holding for the long haul.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

For those with $1,000 to spare -- that's not saved for bills or a rainy day -- let's consider two excellent examples: Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL).

1. Amazon

Amazon is down by 11% this year, perhaps partly because some investors think trade wars could affect the company's financial results.

There is that possibility, but one of the great things about Amazon's business is that it is diversified. It makes money from its e-commerce operations, advertising, and cloud business, and even has a hand in other industries like grocery shopping, pharmacy services, and video and music streaming.

That said, Amazon's two most significant sources of revenue growth are advertising and cloud computing.

The company's ad business hit an annual run rate of $69 billion in 2024, more than doubling in four years. Amazon Web Services (AWS), the company's cloud business, is riding the wave of the artificial intelligence (AI) revolution, with an annual run rate of $115 billion. For context, Amazon's net sales last year were $638 billion, an increase of 11% year over year.

Amazon sees a massive opportunity for generative AI, which the company's CEO, Andy Jassy, called the "largest technology transformation since the cloud." So, short-term problems might negatively impact Amazon's performance. It wouldn't be the first time, either. In 2022, the tech giant reported a rare annual net loss while struggling with economic challenges. But Amazon bounced back and has performed exceptionally well since.

AMZN data by YCharts

Expect the same this time around: Amazon's leadership in several industries ripe for growth, strong moat from the network effect and high switching costs, innovative capabilities, and strong cash generation ability grant it enough flexibility to navigate difficult times and emerge in one piece and with still excellent prospects. That's why the stock is a strong buy on the dip this year. Investors can get five shares of the company for $1,000.

2. Alphabet

Alphabet has been targeted by regulators in the U.S. and, earlier this year, in China for alleged anticompetitive practices. Though the company's results remain strong, it's a risk investors need to factor in when considering whether to buy the stock.

Even with this challenge, though, Alphabet looks attractive. The company is the undisputed leader in online search, thanks to Google. Some initially thought GenAI would disrupt Google's dominance, but Alphabet added an "AI overview" to its search engine.

The Google empire is safe for now and continues to be Alphabet's biggest source of revenue. In the fourth quarter, Google ad revenue increased by 10.6% year over year to $72.5 billion. Alphabet's total revenue was $96.5 billion, up almost 12% compared to Q4 2023.

Alphabet has several other growth drivers. The company is a leader in streaming thanks to YouTube and is one of the "big three" in the cloud industry. These two businesses now have a combined run rate of $110 billion. Alphabet is also doubling down on AI.

Alphabet's growth trajectory should remain strong so long as it keeps regulators at bay. In that department, the worst-case scenario for Alphabet might be to see its business separated into several smaller companies, something the U.S. government has not done in many decades. That's an unlikely outcome, in my view. Monetary penalties for antitrust practices might affect Alphabet's bottom line over a short period but would do little to derail its long-term prospects.

So, investors should remain bullish on the stock despite its legal issues. And now that Alphabet is a dividend stock -- it initiated a quarterly payout last year -- there is one more excellent reason to buy and hold the company's shares, five of which can be had for $1,000.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $305,226!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $41,382!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $517,876!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

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*Stock Advisor returns as of March 18, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Prosper Junior Bakiny has positions in Amazon. The Motley Fool has positions in and recommends Alphabet and Amazon. The Motley Fool has a disclosure policy.