The Nasdaq 100 has experienced a downturn, retreating 11% from its peak last month. This decline has affected major technology and retail stocks, raising concerns among investors. While some see this as a sign of continued volatility, others consider it an opportunity to invest in companies with strong fundamentals at lower prices. Notable names such as Tesla (NASDAQ:TSLA), Palantir Technologies, and Amazon (NASDAQ:AMZN) have all recorded double-digit percentage losses. Investors are now assessing whether these declines indicate further risks or if they present a buying opportunity in a market correction.
Over the past few years, the Nasdaq 100 has exhibited significant fluctuations. During the pandemic, the index initially fell sharply before rebounding and more than doubling in value over a 21-month period. In 2022, it suffered a steep decline of 33%, only to recover by 54% in the following year. This pattern of volatility raises questions about whether the current correction is a temporary dip or a signal of broader market instability.
What Is Driving the Recent Nasdaq 100 Decline?
The latest downturn is attributed to various economic and policy factors. Broadcom, for instance, recently provided a revenue projection that fell short of expectations, contributing to its stock dropping 17% in one month. While semiconductor sales increased, concerns over trade policies and tariffs have added pressure. Despite this, Broadcom’s latest earnings exceeded forecasts, with AI-related revenue growing significantly. Some analysts believe the market overreacted to its guidance, creating a potential opportunity for long-term investors.
Are There Stocks That Could Benefit Long-Term?
Some companies in the Nasdaq 100 continue to show resilience despite the broader sell-off. Axon Enterprise, a company specializing in law enforcement technology, saw a sharp decline after an analyst downgrade but has started recovering due to strong earnings reports. The company reported a revenue increase of 33% in the last quarter, driven by AI-powered tools and a significant order backlog. However, concerns over competition and potential government budget cuts remain factors that investors are watching.
Costco, known for its stability, has also been affected by market fluctuations. Despite this, its membership-based model has continued to generate steady revenue. While new trade tariffs may increase costs, Costco’s reliance on membership fees provides a financial buffer. Analysts maintain a positive outlook on the company, highlighting its history of strong dividend growth and steady customer retention rates.
Investors evaluating the Nasdaq 100’s correction are weighing short-term risks against long-term growth prospects. While some stocks may continue to face pressure, others with solid financial positions and growth potential could recover. Companies like Broadcom, Axon Enterprise, and Costco have demonstrated resilience in past market downturns, suggesting that their recent declines might not necessarily indicate long-term weakness. As uncertainty persists, market participants will closely monitor economic trends and corporate performance to make informed decisions.
