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Markets

The Dow Jones Industrial Average Is in Correction Territory: 2 Historically Cheap Components That Make for No-Brainer Buys Right Now

March 31, 2026 — 05:26 am EDT

Written by

Sean Williams for

The Motley Fool->

Key Points

- The Dow Jones Industrial Average and Nasdaq Composite have officially entered correction territory, with respective declines of 10% and 12.6%, as of March 27.

- An industry-leading financial stock that avoids the typical pitfalls of lenders is historically cheap and ripe for the picking.

- Meanwhile, a foundational puzzle piece in the tech sector is swimming in cash and has seen revenue growth in one of its highest-margin segments reaccelerate thanks to the incorporation of artificial intelligence (AI).

- 10 stocks we like better than Visa ›

Volatility has returned to Wall Street. As of the closing bell on March 27, the stock market's most iconic index, the Dow Jones Industrial Average (DJINDICES: ^DJI), has officially entered correction territory (down 10.01% from its all-time closing high). While the benchmark S&P 500 (SNPINDEX: ^GSPC) hasn't reached correction territory, the Dow is being kept company by the Nasdaq Composite (NASDAQINDEX: ^IXIC), which is down 12.6% from its record high.

Although Iran war uncertainty, inflation fears, and artificial intelligence (AI) bubble worries are currently getting the better of investors, history shows that double-digit percentage declines in Wall Street's major indexes are phenomenal buying opportunities for patient investors.

Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »

Image source: Getty Images.

Among the Dow's 30 components are two historically cheap, brand-name companies that make for no-brainer buys right now.

Visa

The first stock that makes for a genius buy amid the Dow Jones Industrial Average correction is credit-services provider Visa (NYSE: V). Since the financial crisis, shares of Visa haven't declined by more than about a third from their all-time high. They're 21% below their record high, as of March 27.

The beauty of Visa's operating model is that it's not a lender. While some of its peers double-dip on both sides of a transaction, Visa's management has kept it solely focused on payment facilitation. This choice ensures that it doesn't have to set aside capital to cover loan losses or credit delinquencies when economic uncertainty arises. It also helps Visa bounce back from downturns faster than many of its peers.

Additionally, Visa's opportunity beyond the U.S. is tantalizing. Cross-border payment volume has been growing by double-digits and shows little sign of slowing. Whether through acquisitions or organic expansion, Visa has a lengthy runway to broaden its reach into underbanked foreign markets.

Lastly, Visa is historically inexpensive. Its forward price-to-earnings (P/E) ratio of 20 represents a 25% discount to its average forward P/E over the trailing half-decade.

Image source: Getty Images.

Microsoft

The second Dow component that makes for a no-brainer buy as Wall Street's ageless index sinks 10% from its record-closing high is tech titan Microsoft (NASDAQ: MSFT). Its shares have plunged 34% below their all-time high.

One of the more overlooked foundational puzzle pieces to Microsoft's success is its legacy operations, such as Windows and Office. While these segments aren't growing like they were earlier this century, they still generate exceptionally high margins and bountiful cash flow. In other words, these segments feed Microsoft's higher-growth initiatives.

Though cloud computing has been one of Microsoft's leading catalysts for years, it's the company's incorporation of generative AI solutions and large language model capabilities into Azure that's reaccelerating sales growth for one of its highest-margin segments. In Microsoft's fiscal second quarter (ended Dec. 31), constant-currency sales growth for the world's No. 2 cloud infrastructure services platform, Azure, clocked in at 38%.

It also doesn't hurt that Microsoft is swimming in cash. It closed out December with $89.5 billion in cash, cash equivalents, and short-term investments, and is pacing more than $160 billion in net cash from operations for fiscal 2026.

Over the trailing five years, Microsoft has averaged a forward P/E of almost 30. You can buy shares right now for less than 19 times forecast earnings per share in fiscal 2027.

Should you buy stock in Visa right now?

Before you buy stock in Visa, consider this:

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