Nasdaq Correction: The Best Magnificent Seven Stock to Buy on the Dip Right Now

Billy Duberstein, The Motley Fool

Sun, Mar 23, 2025, 3:30 PM 8 min read

The technology-heavy Nasdaq Composite index currently finds itself in correction territory. A stock market correction occurs when the market falls 10% or more from its all-time highs.

Should investors buy the dip? There is a chance the recent pullback will turn into something worse, such as a prolonged bear market. However, most 10% corrections resolve themselves relatively quickly, making them great times to pick up high-quality companies for the long haul.

That means for those looking to add to their long-term portfolios, high-quality stocks in the "Magnificent Seven" group, which has pulled back along with the market, might be great pickups today. Of these seven all-star companies, one ultra-safe name looks like the best of the bunch at this opportune moment.

Over the past 10 years, the Nasdaq has corrected six times, good for about once every 1.67 years. So, the good news is that a correction is a regular, maybe even healthy, part of markets.

On the other hand, sometimes corrections turn into a full-fledged bear market, which is a correction of more than 20% and usually lasts much longer than mere corrections.

It remains to be seen whether the current pullback is a prelude to something worse. Investors will likely not know until April 2, when the Trump administration's reciprocal tariffs on Mexico and Canada are supposed to go into full effect. Even if they do, however, it remains to be seen whether they will cause a full-blown bear market.

Given the highly uncertain impact of tariffs, investors looking to add to their stock portfolios at this moment should stick with high-quality, relatively "safe" stocks that have, nonetheless, experienced pullbacks but could also weather a full-blown recession if it comes to pass. That's why the following Magnificent Seven stock looks so attractive right now.

Microsoft (NASDAQ: MSFT) is the second-largest company in the world today and a staple of many technology portfolios, but that doesn't mean the company can't outperform going forward.

Microsoft is one of just a few companies vying for artificial intelligence (AI) supremacy. Given the massive investment required to compete in the race for artificial general intelligence (AGI), it's not out of the question to think the very largest companies could become even more powerful 10 years from now. After all, people have been wondering whether the law of large numbers would catch up with the Mag-7 stocks for a while. Yet, these incredibly innovative companies have defied skeptics and managed to innovate their way to outsized profit growth over the past decade.