Nasdaq Correction: 2 Stocks to Buy and Hold for a Decade

The Nasdaq Composite index has entered correction territory, down over 9% year to date as of March 10, 2025, and roughly 13% since hitting a high on December 16, 2024. While this correction may seem daunting, it presents a unique opportunity for investors to buy top stocks at a relative discount. Let's dive into why Amazon and Microsoft are two stocks to consider for long-term investment.



Amazon: A Diversified Powerhouse

Amazon's stock has taken a hit, down 11% in 2025 as of March 10. However, this drop isn't due to fundamental changes in the company's business. Amazon's diverse business model, which includes e-commerce, cloud computing through Amazon Web Services (AWS), and an emerging advertising business, positions it for sustained long-term growth.

AWS is Amazon's true growth driver. It's the profit machine that keeps fueling Amazon's expansion. In 2024, AWS brought on key enterprise customers including PayPal, Intuit, and Reddit. The cloud industry will continue to grow as businesses embrace cloud technology, and AWS is poised to lead the pack. Amazon's willingness to spend and reinvest in the business, as evidenced by its $83 billion in capital expenditures in 2024 and planned $100 billion in 2025, further supports this growth.

Amazon's international segment also shows promise. In 2023, it had an operating loss of $2.7 billion, but in 2024, it flipped to an operating income of $3.8 billion. This indicates that Amazon is becoming an international powerhouse, further mitigating risks associated with economic downturns in any single region.

Microsoft: Essential to the Corporate World

Microsoft's stock has also taken a hit, down roughly 10% year to date and close to 19% from its July 2024 high. However, Microsoft's diversified business model, which includes enterprise and consumer software, hardware, cloud computing, gaming, and social media, has integrated itself into the fabric of the corporate world.

Microsoft's products, such as Microsoft Office, Windows, Azure, and LinkedIn, are essential to many corporations' daily operations. This integration acts as a buffer during rough economic times, as companies are less likely to cut back on essential services like cloud computing and software subscriptions.

In Microsoft's second quarter of its fiscal year 2025, it generated $69.6 billion in revenue (up 12% year over year), and its operating income increased 17% year over year to $31.7 billion. Microsoft's large number of enterprise clients and its fast-growing cloud business, along with $71.5 billion in cash, cash equivalents, and short-term investments, help it weather virtually any storm.

Why These Stocks Are Resilient

Both Amazon and Microsoft's diversified business portfolios, including their cloud computing and enterprise software offerings, mitigate risks associated with economic downturns and market corrections. They have multiple revenue streams, ensuring that even if one segment underperforms, the others can help stabilize overall revenue. Their significant investments in cloud computing, which is a rapidly growing industry, ensure sustained long-term growth. Their integration into the corporate world provides a buffer during rough economic times, as companies are less likely to cut back on essential services. Their strong financial positions allow them to continue investing in growth opportunities even during economic downturns.

Conclusion

The current correction in the Nasdaq Composite index presents an opportunity for investors to buy top stocks at a relative discount. Amazon and Microsoft's resilience and growth potential make them strong candidates for long-term investment. Despite short-term market volatility, their diversified business portfolios and essential roles in the corporate world position them for sustained success. So, if you're looking to buy and hold for a decade, these two stocks are worth considering.