2 Great Tech Stocks to Buy If the Stock Market Crashes

The stock market has been volatile lately as investors fret about tariffs, trade wars, inflation, and a potential recession. The great bull run that kicked off after the bleak early days of the pandemic may be coming to an end as economic realities weigh on investor sentiment.

With so much uncertainty, now is the time for investors to prepare themselves to take advantage of tumbling prices on high-quality stocks. If the stock market slumps, Cloudflare (NET -0.82%) and Kyndryl (KD -2.96%) look like great long-term buys.

AI at the edge

Shares of Cloudflare have already tumbled around 35% since peaking earlier this year as worries about inflation, tariffs, and economic uncertainty roiled the stock market. Even after this decline, Cloudflare remains an expensive stock. Based on the average analyst estimate for fiscal 2025, the compamy sports a price-to-earnings ratio of 140.

While Cloudflare stock is priced for perfection, there’s a lot to like about the company. Its edge computing network, which spans more than 335 cities around the world, grants the company an incredible amount of optionality. On top of Cloudflare’s core security and caching products, it has built a wide array of additional products, including Zero Trust services, various database and storage products, and ultra-fast artificial intelligence (AI) inference. By 2027, Cloudflare expects its total addressable market to reach $222 billion, thanks to this continual expansion.

AI is a particularly large opportunity for the company. Cloudflare is focused on providing fast, efficient, and inexpensive AI inference to its customers. Its AI platform integrates with its serverless computing services, allowing customers to easily run a variety of AI models directly on Cloudflare’s network or use its AI Gateway service to access third-party models. AI agents, which are designed to autonomously perform multistep tasks using AI models, are well suited to run on Cloudflare’s network.

At the right price, Cloudflare stock would be a great long-term buy. Investors may have a golden opportunity to pick up shares if the stock market takes a dive this year.

Profit-margin explosion

Many investors probably haven’t heard of Kyndryl, and that’s a real shame. The IT services provider was spun out of IBM a few years ago, inheriting unattractive contracts that dragged down its bottom line. The plan was to work though those obligations while focusing on higher-margin opportunities, a multiyear process that’s only now starting to show results.

In fiscal 2025, Kyndryl expects about half of its revenue to come from higher-margin deals struck after the company became independent, with the rest coming from lower-margin legacy deals. By fiscal 2028, the company sees revenue from higher-margin deals surpassing 90% of total revenue. The impact on the company’s bottom line, if all goes to plan, will be nothing short of miraculous.

Kyndryl expects to more than double its pre-tax profit and triple its adjusted free cash flow over the next three years as the shift to higher-margin deals plays out. With $1 billion in free cash flow projected for fiscal 2028, Kyndryl’s $8 billion market capitalization looks like a steal.

One thing to remember, though, is that Kyndryl operates in an incredibly competitive industry that’s sensitive to economic conditions. The stock has surged over the past couple of years as investors began to wake up to the opportunity, but a recession would likely delay the company’s plan to boost profits and free cash flow.

In the long run, Kyndryl should be able to hit those targets as it focuses on high-margin contracts. However, there’s plenty of uncertainty, given the turmoil rippling through the economy and the stock market right now.

If Kyndryl stock drops significantly from here as investors sell off stocks, the IT services provider should be on the top of your watchlist. Kyndryl is an underappreciated company with a sound strategy and the potential to deliver market-beating gains over the next few years.