One of Wall Street's oldest clichés is that stocks take the stairs or escalator up and the elevator down. This has certainly held true in recent weeks.
Following a more than two-year bull market, which saw the Dow Jones Industrial Average (^DJI 1.64%), S&P 500 (^GSPC 0.56%), and Nasdaq Composite (^IXIC 0.26%) rocket to numerous record-closing highs, all three indexes have been clobbered since the midpoint of February.
Between Feb. 19 and April 4, the Dow Jones, S&P 500, and Nasdaq Composite have shed 14.2%, 17.4%, and 22.3% of their respective value. This places all three indexes firmly in correction territory, with the Nasdaq Composite also moving beyond the traditional line-in-the-sand 20% decline that defines a bear market.
President Donald Trump discussing auto tariffs. Image source: Official White House Photo.
Wall Street comes tumbling down amid Trump tariff uncertainty
The final two days of the previous week (April 3-4) were particularly challenging. Losses of 1,050 points and 963 points on consecutive days marked the largest and third-largest single session point declines in the Nasdaq's storied history. Meanwhile, the S&P 500's 274-point and 322-point declines in back-to-back sessions were its respective third- and second-largest single-day point drops. To round things out, the Dow endured its sixth- and third-biggest single-session point drops since its inception. In other words, we're witnessing a crash unfold before our eyes.
This crash has been precipitated by President Donald Trump's use of tariffs in an effort to strengthen the American economy and support domestic jobs. On April 2, which the president dubbed as "Liberation Day," he introduced a sweeping global tariff of 10%, as well as a host of reciprocal tariffs on countries that have historically run trade imbalances with the U.S.
While the president and his administration feel confident that tariffs will raise additional revenue and/or give America a bargaining chip to forge beneficial trade deals, investors are clearly worried about the prospect of higher inflation, worsening trade relations, and a recession taking shape.
The silver lining of this Trump tariff crash is that it's giving opportunistic long-term investors a chance to buy stakes in magnificent companies at a discount. What follows are three exceptional businesses you can buy into at a bargain price right now.
NYSE: NEE
Key Data Points
NextEra Energy
The first surefire stock that makes for a slam-dunk buy amid the Trump tariff crash is America's largest electric utility by market cap, NextEra Energy (NEE 1.67%).
The beautiful thing about utility stocks, aside from their consistent dividends, is they provide a basic necessity service. Regardless of whether you own or rent your home, there's a high probability you'll need electricity to power your appliances and/or HVAC system. Demand for electricity doesn't change much from one year to the next, and it's not something that's subject to import tariffs.
To add to this point, the overwhelming majority of electric utilities act as monopolies or duopolies in the areas they service. The exorbitant expense of getting the necessary infrastructure in place ensures that NextEra Energy has no competitors. This further solidifies the transparency of its operating cash flow.
What's allowed NextEra Energy to stand out from its peers is its clean-energy focus. No electric utility in the world is generating as much capacity from wind or solar as NextEra. While it's been costly to complete these projects, the end result is lower electricity generation costs than its peers, along with a considerably faster growth rate.
Few stocks have demonstrated a level of return consistency quite like NextEra Energy. Over the previous 23 years, it's generated a positive total return, including dividends, 20 times. With its shares now valued at less than 17 times forward-year earnings -- this is a 32% discount to its trailing-five-year average -- the time to pounce has arrived.
Image source: Getty Images.
Realty Income
Another exceptional business that's begging to be bought during this tariff-induced crash is Wall Street's premier retail real estate investment trust (REIT), Realty Income (O 1.79%). Realty Income pays a monthly dividend and has increased its payout for 110 consecutive quarters!
While most retailers are exposed to President Trump's import tariffs, the impact on Realty Income, which leases to an assortment of retail-driven businesses, is almost nonexistent.
When 2024 came to a close, Realty Income owned 15,621 commercial real estate (CRE) properties. More than nine out of 10 of these CRE properties is believed to be resistant to e-commerce pressures and resilient to economic downturns.
More importantly, these properties are being leased by predominantly brand-name, stand-alone businesses that drive traffic in any economic climate. Think grocery stores, dollar stores, drug stores, and automotive stores. Regardless of the state of the current economy, people are still going to purchase groceries and maintain their vehicles.
NYSE: O
Key Data Points
Furthermore, Realty Income's CRE portfolio has a weighted average lease term of 9.3 years. Less than a third of its existing leases are set to expire before 2030. This means Realty Income's funds from operations are highly predictable and transparent year after year.
To keep with the theme, Realty Income stock is also a bargain. Investors can take a position right now at 12 times forecast cash flow for 2026, which equates to a 26% discount to its average multiple to cash flow over the last half-decade.
Airbnb
For growth-seeking investors, Trump's tariff crash has created a perfect opportunity to buy shares of stay-and-hosting platform Airbnb (ABNB +0.16%) at a discount.
While there is the possibility that discretionary spending by consumers could taper over the short-term, it's important to recognize that every downturn in the U.S. economy over the last eight decades has been relatively swift -- between two and 18 months. With the typical economic expansion since the end of World War II sticking around for approximately five years, Airbnb is an ideal company to take advantage of a growing U.S. economy.
NASDAQ: ABNB
Key Data Points
The company's key performance indicators also aren't suggestive of a slowdown in spending. Airbnb booked 491.5 million nights and experiences last year, representing a 10% increase from 2023.
Further, it continues to add value to its platform by enhancing search functionality and offering flexible payment options. The willingness of management to spend aggressively on platform improvements should help with conversion rates and give Airbnb plenty of online marketplace pricing power.
Perhaps most exciting is that Airbnb is just touching the tip of the iceberg in terms of building out its Experiences segment. Though it's been able to generate meaningful revenue by partnering with local experts, Airbnb has the opportunity to expand this segment to include restaurant and transportation partnerships that gobble up a considerably larger piece of the travel industry's annual pie.
Airbnb's double-digit sales growth rate and forward price-to-earnings ratio of at 21 makes its stock a smart buy.
