News flash: stocks can go down just as easily as they can climb. Every now and then, investors are given a wake-up call that the stock market wouldn't be a "market" without the ability for equities to move in both directions.
Following a steady climb for Wall Street's major stock indexes, the broad-based S&P 500 (^GSPC 0.11%) and growth-oriented Nasdaq Composite (^IXIC +0.35%) both recently entered correction territory, which is defined as a decline of at least 10% from a closing high. Although the rally on Friday, March 14, pulled the S&P 500 out of official correction territory, the sell-off in the Nasdaq Composite is still firmly in place. Since Feb. 19, the Nasdaq has plunged by 11.5%, through the closing bell on March 14.
Image source: Getty Images.
Although panic is commonplace when the Nasdaq Composite takes the elevator down, history shows that moves lower in Wall Street's major indexes tend to be short-lived. This means any sizable downturn in the Nasdaq Composite, or any major stock index for that matter, represents the perfect opportunity for long-term investors to pounce.
The recent Nasdaq sell-off has been creating attractive price dislocations for investors to take advantage of. What's perhaps even more noteworthy is that some of the most-attractive stocks to buy are companies that prominent billionaire money managers also love.
What follows are three superb stocks -- loved by billionaire investors -- that you can confidently add to your portfolio amid the Nasdaq sell-off.
Amazon
The first premier stock that's grown more attractive by the day as the Nasdaq Composite sinks is e-commerce titan Amazon (AMZN +2.05%). Since hitting an all-time high in early February, Amazon stock has fallen by as much as 20%.
NASDAQ: AMZN
Key Data Points
Before digging into the details of what makes Amazon such a compelling deal at the moment, it's important to recognize just how many billionaire asset managers believe in this company. Based on Form 13F filings with the Securities and Exchange Commission, which details holdings as of Dec. 31, 2024:
- Philippe Laffont of Coatue Management held 10,670,209 shares.
- Warren Buffett of Berkshire Hathaway held 10,000,000 shares.
- Chase Coleman of Tiger Global Management held 6,415,488 shares.
- Stephen Mandel of Lone Pine Capital held 3,789,034 shares.
- Dan Loeb of Third Point held 3,450,000 shares.
- Ole Andreas Halvorsen of Viking Global Investors held 2,614,074 shares.
- David Tepper of Appaloosa Management held 2,600,000 shares.
Though most consumers are familiar with Amazon because of its online retail marketplace, only a relatively small percentage of the company's operating cash flow and income traces back to this segment. Most investors are buying Amazon stock for its cloud-service platform, Amazon Web Services (AWS), and its steadily growing services, such as advertising and subscriptions.
As of the end of 2024, tech firm Canalys estimated AWS's global share of cloud infrastructure service spend at a whopping 33%! AWS is generating more than $115 billion in annual run-rate revenue, yet businesses are still in the relatively early stages of ramping their cloud spending. Additionally, Amazon's incorporation of generative artificial intelligence (AI) solutions should only enhance future growth prospects for AWS.
Throughout the 2010s, investors were comfortable paying a median of 30 times year-end cash flow to own shares of Amazon. Opportunistic investors can pick up Amazon stock, as of this writing, for less than 12 times forecast cash flow in 2026.
Image source: Sirius XM.
Sirius XM Holdings
Another sensational stock that can be purchased with confidence during the Nasdaq sell-off is satellite-radio operator Sirius XM Holdings (SIRI +1.15%). Shares of Sirius XM are down 45% over the trailing year.
There's only one billionaire buyer of Sirius XM stock who really stands out, and he's the most-followed money manager on Wall Street. Berkshire Hathaway's Warren Buffett has built up a 35.4% stake in the company, totaling 119,776,692 shares, as of Feb. 3, 2025.
The aptly named "Oracle of Omaha" is a big fan of businesses with sustainable moats and well-defined competitive advantages. Sirius XM brings both to the table for its shareholders.
To start with, it's the only licensed satellite-radio operator. While being a legal monopoly, in this sense, doesn't mean it's free of competition for listeners, it does afford Sirius XM a level of subscription pricing power that allows it to stay ahead of the inflationary curve.
But Sirius XM Holdings' biggest competitive edge might be the diversity of its revenue stream. Terrestrial and online radio companies rely almost exclusively on ad spending. It's a strategy that works wonders when the U.S. economy is expanding, but can create hardships during recessions or periods of fear and uncertainty.
NASDAQ: SIRI
Key Data Points
Meanwhile, Sirius XM generated only 20% of its net sales in 2024 from selling ads (most of which were associated with Pandora, which it acquired in 2019). A little over three-quarters of its net sales can be traced back to subscriptions. When economic uncertainty arises, Sirius XM's subs are less likely to cancel their service than businesses are to notably cut back their ad spending. In short, Sirius XM's cash flow is stabler than traditional radio operators.
What ties things into a nice bow is Sirius XM's valuation. With the stock market coming off its third-highest valuation in 154 years, based on the S&P 500's Shiller price-to-earnings (P/E) ratio, Sirius XM's forward P/E ratio of a little north of 7 is a genuine steal.
Meta Platforms
The third stock you can confidently buy amid the Nasdaq sell-off that also happens to be a favorite among billionaire money managers is social media maven Meta Platforms (META +0.23%). Similar to Amazon, shares of Meta have backed off their recent all-time high by as much as 20%.
Despite this downturn, it remains an exceptionally popular stock to own by billionaire investors. Based on fourth-quarter 13Fs:
- Chase Coleman of Tiger Global Management held 7,465,139 shares.
- Terry Smith of Fundsmith held 4,561,352 shares.
- Philippe Laffont of Coatue Management held 3,686,378 shares.
- Stephen Mandel of Lone Pine Capital held 2,036,930 shares.
- Dan Loeb of Third Point held 665,000 shares.
- David Tepper of Appaloosa Management held 490,000 shares.
For Chase Coleman, Terry Smith, and Stephen Mandel, Meta Platforms is their respective top holding, with Meta clocking in as the second-largest position by market value for Philippe Laffont.
NASDAQ: META
Key Data Points
The great thing about Meta is the stability of its foundational social media sites. Collectively, Facebook, WhatsApp, Instagram, Facebook Messenger, and Threads helped to lure an average of 3.35 billion daily active users to its social sites in December. Since no other social media company comes particularly close to this figure, advertisers are often lining up and willing to pay a premium to get their message(s) in front of users.
There's also plenty of excitement for Meta's incorporation of AI solutions. Generative AI is allowing businesses to tailor their messages to users. Further, AI is expected to play a key role in building out the metaverse, which is the 3D virtual environment where users can interact with each other and their surroundings.
Tying everything together is Meta's still-attractive valuation. Despite catapulting higher following its 2022 bear market low, shares of Meta are valued at a very reasonable forward P/E of 21. Given the strong possibility of sustained double-digit sales growth, there's a good chance Meta stock heads higher over the long run.
