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The S&P 500 stock market index has more than doubled from its 2022 bear market low point, driven by the technology sector, which has produced particularly strong returns thanks to the ongoing artificial intelligence (AI) boom. However, a rising inflation rate, interest rate hikes, and even a potential slowdown in AI development by labs like Anthropic and OpenAI could derail the current bull market.
The risk of a severe downturn is especially high right now because of the market's elevated valuation. The S&P 500 has a Shiller Cyclically Adjusted Price-to-Earnings (CAPE) ratio of 41.4, the second-highest level since the peak of the dot-com internet bubble in 2000. The index plummeted by 49% when that bubble eventually burst, and while I'm not predicting a similar decline this time around, investors might want to use caution.
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Fortunately, the market typically trends higher over the long term, so any severe crash will almost certainly be a buying opportunity. Below, I'm going to share three stocks that investors might want to scoop up at a discount if the broader market tumbles and these stocks dip with it.
Zscaler (NASDAQ: ZS) was one of the early pioneers of the zero-trust cybersecurity architecture, which is now one of the best defenses against increasingly sophisticated AI-powered attacks. Zscaler's Zero Trust Exchange starts by protecting the identity layer, treating all network login attempts as hostile. It verifies each user not only by their credentials, but also by their location and the device they are using to ensure it's really them.
Moreover, the Zero Trust Exchange only gives employees access to the applications they need to complete their jobs, so a hacker won't have free rein within the corporate network even if they bypass the identity layer. Zscaler added new tools to the Exchange earlier this year, like AI Broker, which strictly monitors communications between AI agents, and Endpoint AI Security, which protects the computers and devices employees are using to run AI applications.
This is all a part of Zscaler's "Zero Trust Everywhere" philosophy, which is now critical because AI-powered threats are constantly hunting for vulnerabilities in corporate networks. Keeping assets and internal agents hidden behind something like the Exchange has never been more important.
Zscaler generated a record $3.35 billion in revenue during its 2026 fiscal year (ended July 31), a 25% increase from the prior year. Its stock is already attractively valued, so any sell-off during a broader market correction could be a very juicy buying opportunity. With a price-to-sales (P/S) ratio of 9.3 as I write this, it's far cheaper than rivals like CrowdStrike and Palo Alto Networks.
Dozens of companies around the world are developing self-driving cars, but Uber Technologies (NYSE: UBER) isn't one of them. Instead, it's partnering with many of those companies and allowing them to deploy their vehicles into its global ride-hailing network.
This is a win-win arrangement. Developers of self-driving cars can immediately access Uber's pool of 208 million monthly active customers, while Uber gets to offer autonomous vehicles without incurring the costs involved in designing or manufacturing them. Plus, Uber paid $25 billion to the human drivers in its network during the second quarter of 2026 (ended June 30), which was its single largest cost, so the shift toward autonomous vehicles will significantly improve the company's financial results.
Like Zscaler, Uber stock is already attractively valued. Based on the company's trailing 12-month revenue of $55.2 billion, its stock is trading at a P/S ratio of just 2.5, making it significantly cheaper than the technology-heavy Nasdaq-100 index, which has a P/S ratio of 6.5. Therefore, Uber looks like a solid investment even today, so any dip in its stock from here could be a great long-term buy.
The average business doesn't have the billions of dollars or technical expertise required to build its own AI data centers. Therefore, many of them choose to rent computing capacity from third-party cloud providers. Amazon and Microsoft dominate this particular industry, but DigitalOcean (NYSE: DOCN) is taking the fight to those trillion-dollar giants.
DigitalOcean operates around 20 AI data centers spread across the globe, and they are fitted with specialized chips from suppliers like Nvidia and Advanced Micro Devices. It rents the computing capacity to businesses through a platform called AI-Native Cloud, which also provides access to the latest foundation models from labs like Anthropic and OpenAI, in addition to over 70 open-source models.
DigitalOcean had $1.1 billion in annual recurring revenue (ARR) as of June 30. AI customers accounted for $234 million of that total, a whopping 212% increase from the year-ago period. That growth rate could accelerate, because the company's order backlog from customers who were waiting for more data centers to come online was $894 million as of June 30, a staggering 12-fold increase from the same time last year.
DigitalOcean stock is trading at a P/S ratio of 15.7, a steep premium to its five-year average of 7.9, so some of its future growth is already priced in. While I wouldn't buy it at the current price, it could be an enticing long-term buy if it experiences a correction of 20% to 30% in the coming months.
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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, CrowdStrike, DigitalOcean, Microsoft, Nvidia, and Zscaler. The Motley Fool recommends Palo Alto Networks and Uber Technologies. The Motley Fool has a disclosure policy.
3 Glorious Growth Stocks to Buy Hand Over Fist if the Stock Market Crashes was originally published by The Motley Fool
