If market fluctuations occur in 2025, consider investing in these two stocks:
2024 saw an impressive year for the S&P 500, but even this powerhouse took a 9% dip at some point. Don't be alarmed by this; market corrections, a drop of over 10%, happen almost annually in the investment world. So, it's always wise to have a list of potential stocks you're ready to invest in during these dips. If the market plunges in 2025, I've got my eye on two stocks: CrowdStrike and Taiwan Semiconductor Manufacturing.
I've already got both of these stocks in my portfolio due to their strong long-term potential. However, should the market take a turn for the worse, I'm more than ready to add more to my holdings.
CrowdStrike
CrowdStrike is a top cybersecurity software provider, known not just for its endpoint protection software, but for striving to become a one-stop cybersecurity shop. With a staggering 66% of its clients utilizing at least five of its products in 2025's third quarter, and 20% using eight or more, it's clear that CrowdStrike is building powerful relationships with its clients.
With a goal of hitting $10 billion in annual recurring revenue (ARR) by FY 2031, CrowdStrike's impressive growth rate – up 27% year over year at $4.02 billion in ARR – is certainly a promising sign. Reaching this goal would require a compound annual growth rate (CAGR) of 16%, which is within reach if the company continues to welcome new clients and boost its existing customers' product usage.
However, with such outstanding success, CrowdStrike's share price has risen quite significantly, currently trading for 23.6 times sales – a bit rich for my taste. But for a promising long-term investment, I'm definitely keeping my eye on it, especially if the market experiences a correction.
Taiwan Semiconductor
Taiwan Semiconductor Manufacturing Company, or TSMC, is the world's leading contract chip manufacturer, producing components for tech giants like Nvidia and Apple. TSMC's customers design their chips, which are then manufactured by TSMC. This strategic position allows TSMC to supply its clients with chips, even if they're competitors.
In the realm of AI investing, an investment in TSMC is an investment in the tech industry – no matter which AI company becomes a winner, its products will likely rely on TSMC chips. With AI-related revenue projected to triple by the end of 2025, it's clear that TSMC's success is far from slowing down.
While the stock price has swelled as a result, with a P/E ratio of about 23 times 2025 earnings, it still seems fairly priced to me. Considering TSMC's crucial role in the technology sector, I'm not holding out for a market correction to buy more. But should one occur, I'll jump at the chance to increase my stake.
Enrichment Data Integrated:
- Market corrections are influenced by a variety of historical patterns and factors, including economic cycles, breadth divergence, investor sentiment, and inflation. Investors typically approach buying during market corrections using strategies like "buy and hold," defensive investing, technical analysis, sector rotation, and risk management.
- Given the potential for market corrections, it's essential to have a shortlist of finance-oriented companies with strong long-term potential, such as cybersecurity provider CrowdStrike and chip manufacturer Taiwan Semiconductor Manufacturing.
- When investing in CrowdStrike, one should consider its impressive growth in the cybersecurity industry and the potential for a market correction to drive down its share price, making it a more attractive option for long-term investments.
- Similarly, Taiwan Semiconductor's strategic position in the technology industry and its increases in AI-related revenue make it an attractive choice for AI investors, and a potential target for increased holdings during market downturns.
- During periods of tailwinds in the investment world, it's important for investors to closely monitor their portfolios, even in promising stocks like CrowdStrike and Taiwan Semiconductor, identifying opportunities for rebalancing or reinvestment based on market conditions and individual investment strategies.
