Famous investor Warren Buffett says to "be greedy when others are fearful," and as investors, we all aim to buy low and sell high. So why is it that so often, both retail and professional investors do the opposite? For one thing, if investors all did this, then the market wouldn't really work anyway. But mostly, it's because it is difficult to look past the daily gloomy headlines when times are tough. The ability to do that, though, is one of the key attributes required to be a successful long-term investor.

Case in point: The markets appear sour in the short term about Alphabet (GOOG 0.92%) (GOOGL 0.93%), Palo Alto Networks (PANW -0.73%), and Intuitive Surgical (ISRG 0.68%), yet all three look like intriguing long-term opportunities.

1. Alphabet is undervalued

I'm sure you have heard all about ChatGPT by now. This incredible artificial intelligence (AI) technology is really cool (and, I'll admit, a bit frightening), but it won't spell the end of Google's stranglehold on search advertising. Google Search is used for about 85% of all desktop searches globally, and that share is unlikely to change much anytime soon. First, the ChatGPT chatbot isn't ready for prime time as a Google Search rival. It's not updated in real time, has serious capacity problems, and has many other issues to tackle. Most importantly for investors, it isn't monetizable yet.

Meanwhile, Alphabet has been developing its own AI technology for years and may not be behind as many think

Google Search generated $162 billion in sales in 2022, pushing Alphabet's total sales to $283 billion on 10% growth despite the tough economy. Even better, Alphabet maintained its impressive cash flow with $91.5 billion generated from operations, on par with 2021 and up 40% from 2020. The company used $59 billion to buy back stock in 2022 (and plans to use much more), which increases the ownership interest of the remaining outstanding shares.

Alphabet stock has fallen along with many growth stocks, and trades below its 2019 price-to-earnings ratio and well below its recent average, as shown below.

GOOG PE Ratio Chart

GOOG PE Ratio data by YCharts.

There will definitely be challenges for Alphabet as advertisers may look to cut spending during the demanding economy. But Alphabet is well prepared to weather the storm and looks like a value for long-term investors.

2. Palo Alto continues to dazzle

Palo Alto Networks strategically transformed from a next-generation firewall company into a subscription-based next-generation Security platform a few years ago with tremendous success. In the fiscal 2022 fourth-quarter report it delivered in August, the company noted that back in 2018, Palo Alto was a recognized leader in just one category. By 2022, it was a leading player in 11 categories.

This success is easy to see in the financials. In its fiscal 2023 second quarter, Palo Alto generated $1.66 billion in sales -- up 26% year over year -- and free cash flow of $685 million, a 55% increase. While companies may be looking for ways to cut costs right now, they can ill afford to trim cybersecurity budgets. As shown below, Palo Alto raised its fiscal 2023 guidance in nearly every category last quarter.

Palo Alto guidance

Source: Palo Alto Networks.

Organizations' cybersecurity needs don't lessen during a recession. Indeed Palo Alto's remaining performance obligation (a metric similar to backlog) has mushroomed to $8.8 billion. Palo Alto stock doesn't come cheap, but the company has tremendous secular potential, and its results continue to shine.

3. Intuitive Surgical has a lengthy runway

Robotic-assisted surgery is here. You may have seen Intuitive Surgical's da Vinci Surgical machines used in a popular reality television series or even experienced the advantages of minimally invasive surgery (like fewer complications, reduced scarring, less pain, and faster recovery) yourself. Surgeons at the Mayo Clinic use the machine for numerous procedures, as do those at tons of others hospitals. More than 7,500 of the systems have been installed worldwide.

Yet Intuitive Surgical still has a long runway for growth. People 65 and older will comprise 21% of the U.S. population by 2030, up from 15% now, and this number will continue to grow, according to the Census Bureau. This means more people who will require care, and many more procedures to be performed. This benefits Intuitive since it generates more than 70% of its revenue from recurring sources like sales of instruments, accessories, and services. The more procedures that surgeons perform with its devices, the more money it makes. 

Intuitive's financial results are top-notch, with an operating margin of 25%, 8% of its market cap in cash and investments, and no long-term debt. The company is also repurchasing its stock at a steady clip. As investors grapple with a slowing economy, Intuitive's share price is down 25% from its 52-week high. That makes now a smart time for secular growth investors to take another look at this stock.