Just a few weeks after the Nasdaq Composite approached a new record high, this tech-focused index has now experienced a correction, which is typically defined as a drop of 10% or more.
Investor sentiment has quickly soured due to worries about President Trump’s trade policies, declining consumer confidence, and inflated valuations. The backdrop of potential recession fears is also influencing the market.
While it can be disheartening to witness a decrease in your investment portfolio, seasoned investors understand that market downturns can offer prime buying opportunities, as high-potential growth stocks often get sold off by investors looking to secure profits and avoid further losses.
In my opinion, these two stocks are presenting themselves as appealing purchases amid the current market correction.
1. Axon Enterprise
Axon Enterprise (AXON 0.26%) was among the top gainers in the S&P 500 last year, boasting a remarkable 130% increase, and it has proven to be a strong performer over the last decade.
Axon specializes in law enforcement technology, producing products like Taser conductive weapons, body and dashboard cameras, and various cloud software solutions that assist law enforcement in managing records and evidence. The company is also investing in advanced AI technologies, launching a generative AI tool called Draft One that creates initial drafts of police reports based on body and dash cam video footage, which has garnered positive feedback from officers.
2. Taiwan Semiconductor Manufacturing Company
Taiwan Semiconductor Manufacturing Company (TSM -0.56%), or TSMC, while not listed on the Nasdaq, is the largest independent semiconductor manufacturer globally and shares a close connection with the tech sector, particularly chip stocks.
Given its key position in the tech landscape, TSMC is affected by the global economic climate, as chip demand and pricing tend to fluctuate with economic conditions. However, the ongoing AI boom is providing robust support for TSMC, expected to continue even with increasing economic uncertainty.
In the fourth quarter, TSMC reported a 39% revenue increase to $26.9 billion, maintaining a strong operating margin of 49%. Major companies like Apple, Nvidia, Broadcom, and AMD rely on TSMC for chip manufacturing. TSMC’s advanced capabilities distinguish it from competitors such as Intel and Samsung.
