The Nasdaq Is Down 8% From Its High. These Are the Tech Stocks I'd Buy First.
Summarize this article with:
By Prosper Junior Bakiny – Mar 26, 2026 at 1:30PM ESTKey PointsThese two companies have excellent prospects, partly thanks to their work in AI.Both look attractively valued right now. As geopolitical tensions persist and some fear a looming recession, many investors are withdrawing funds from tech stocks and allocating them to perceived safer investments. That's partly why the tech-heavy Nasdaq Composite is down about 8% from its all-time high (as of writing), which it hit late last year, lagging the two other major U.S. market indexes over this period. However, this has created attractive opportunities to invest in quality tech stocks on the dip. Here are two that should be on investors' lists: Microsoft (MSFT 1.29%) and Meta Platforms (META 8.05%). Image source: Getty Images. 1. Microsoft Microsoft's shares began to decline before any of the recent volatility surrounding geopolitical tensions. Investors are increasingly worried that its runaway investments in artificial intelligence (AI) won't pay off, and according to many, it hasn't in recent quarters, with Microsoft Azure growth coming in strong -- but not quite as strong as some expected. But those bullish on AI should double down on Microsoft, especially at current levels. Here are three reasons why. First, as CEO Satya Nadella said: "We are in the beginning phases of AI diffusion and its broad GDP impact. Our TAM [Total Addressable Market] will grow substantially across every layer of the tech stack as this diffusion accelerates and spreads." This large opportunity could be a massive tailwind for Microsoft for years to come as the company continues to integrate AI across its business. Microsoft's Copilot, an AI-powered virtual helper of sorts that includes video and image generation capabilities, is now part of Microsoft 365. Microsoft offers a wide range of other AI products and services through the cloud, including some of the leading large language models. ExpandNASDAQ: MSFTMicrosoftToday's Change(-1.29%) $-4.78Current Price$366.26Key Data PointsMarket Cap$2.8TDay's Range$366.00 - $374.6952wk Range$344.79 - $555.45Volume1.4MAvg Vol35MGross Margin68.59%Dividend Yield0.94% Second, despite what appears to be heavy spending, the tech giant generates plenty of cash and has even more to pour into R&D to remain one of the leaders in AI. Microsoft generated $77.4 billion in free cash flow over the past 12 months. Third, Microsoft's shares currently look fairly valued when compared to its peers in the Magnificent Seven. Microsoft's forward price-to-earnings (P/E) ratio is in the bottom half compared with these leading tech companies. MSFT PE Ratio (Forward) data by YCharts Now, the stock could remain volatile in the short-term, especially if we officially enter a recession, geopolitical issues intensify, or other headwinds arise. However, those in it for the long haul should seriously consider purchasing Microsoft's shares at current levels. 2.
Meta Platforms Meta Platforms also hasn't performed so well in recent months, despite solid financial results. The company's shares did jump following its fourth-quarter earnings, as revenue and earnings continue to grow rapidly, but that has been overshadowed by fears that heavy AI-related investments will eventually erode profits. However, Meta Platforms is already benefiting from AI. The company has significantly increased engagement across its websites and apps thanks to AI-powered algorithms that recommend appropriate content to its users and keep them glued to their screens. This is more than just time spent on the company's websites, which is already important. But it also grants Meta Platforms plenty of data on its users' preferences and habits, which can be used to craft targeted ads. This is why Meta Platforms is one of the leading digital ads companies in the world. And the tech leader is still working to improve its ad business, notably through AI-powered tools that simplify the ad launch process and improve ad performance. ExpandNASDAQ: METAMeta PlatformsToday's Change(-8.05%) $-47.91Current Price$546.98Key Data PointsMarket Cap$1.5TDay's Range$543.45 - $582.8052wk Range$479.80 - $796.25Volume2MAvg Vol14MGross Margin82.00%Dividend Yield0.35% True, Meta Platforms' large investments in the metaverse did not yield the results the company expected, and it had to pivot to other areas.
But Meta Platforms' ability to bounce back from that and still perform as well as it is today actually highlights the strength of the company's business. Lastly, the stock also looks more than fairly valued, with a forward P/E that is lower than every single one of its peers in the Magnificent Seven. Meta Platforms might just be a great buy right now.Read NextMar 26, 2026 •By James BrumleyEverybody Thinks AI Spending Is Peaking. This Company's Order Book Says Otherwise.Mar 26, 2026 •By Adam SpataccoMicrosoft Is Having Its Worst Start to a Year Since 2008. Is That a Red Flag or a Once-in-a-Decade Buying Opportunity?Mar 26, 2026 •By John BallardNvidia Says the "Inflection Point of Inference" Has Arrived. Here Are 2 AI Stocks to Buy for 2026.Mar 25, 2026 •By Keithen Drury2 AI Stocks Down 20% or More That Are Screaming BuysMar 25, 2026 •By Adam SpataccoThe Last Time the Nasdaq Sold Off Like This, These Were the Best Stocks to Own. Here's What They Tell Us About 2026.Mar 25, 2026 •By Keithen DruryIs Microsoft Stock a Buy Right Now? Here's What the Data Says.About the AuthorProsper Junior Bakiny is a contributing Motley Fool healthcare analyst covering biotechnology, pharmaceuticals, and healthcare stocks.
Before The Motley Fool, Prosper wrote about investing topics ranging from stock market news to private equity for various companies. He holds a master’s degree in corporate finance from the University of Maryland Global Campus.TMFPBakinyStocks MentionedMicrosoftNASDAQ: MSFT$366.29(-1.28%)-$4.75Meta PlatformsNASDAQ: META$545.74(-8.26%)-$49.15AlphabetNASDAQ: GOOGL$281.27(-3.32%)-$9.66AppleNASDAQ: AAPL$254.18(+0.62%)+$1.56TeslaNASDAQ: TSLA$375.38(-2.74%)-$10.57AmazonNASDAQ: AMZN$207.95(-1.78%)-$3.76NvidiaNASDAQ: NVDA$172.13(-3.67%)-$6.56AlphabetNASDAQ: GOOG$281.10(-2.93%)-$8.49*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.