4 S&P 500 Stocks Down Over 20% That Could Be Smart Long-Term Buys

In the fast-paced world of investing, downturns in the market often spark panic — but for smart investors, they can signal opportunity. The S&P 500 recently entered correction territory, and although it appears to be bouncing back, several high-quality stocks remain down by 20% or more. That includes Alphabet, Vistra, Dollar General, and Airbnb — all of which have strong fundamentals and long-term growth potential.

Here’s why you might regret not picking them up while they’re still discounted.

1. Alphabet (GOOG, GOOGL)

Alphabet, a cornerstone of the so-called “Magnificent Seven”, is currently the cheapest of the group — trading at under 19x forward earnings, significantly lower than the S&P 500’s average of over 26x.

This isn’t just a discount — it’s a potential bargain for a company with:

A massive advertising empire generating $72 billion in 2024 (11% YoY growth)
A fast-growing cloud business, up 30% to $12 billion
Strategic bets in AI, quantum computing, self-driving cars, and robotics

Investors looking for exposure to leading-edge innovation with a solid financial backbone should seriously consider Alphabet. At 20% below its recent highs, this may be a rare chance to buy a tech titan at a value price.

2. Vistra (VST)

While AI grabs headlines, Vistra represents a more grounded — yet just as powerful — trend: the explosive demand for electricity. As the U.S. power grid stretches to meet rising consumption from data centers and EVs, Vistra stands to benefit as one of the country’s largest competitive nuclear energy providers.

Key fundamentals include:

Expected EBITDA of $5.5B–$6.1B in 2025
An enterprise value of $62 billion, trading at just 10–11x EBITDA
A long-term macro trend driving demand for stable, clean energy sources

With shares down 32% from recent highs, Vistra is a compelling energy play — especially for investors who believe that AI’s infrastructure needs will fuel an electricity boom through the end of the decade.

3. Airbnb (ABNB)

Airbnb has fallen 21% from its 2025 peak, and many believe the platform is losing steam. But the data tells a different story.

More bookings than ever in 2024, despite rising average daily rates
Record free cash flow, with shares trading near historically low valuations
A new strategic phase launching in 2025 — with leadership hinting at ventures beyond travel, inspired by Amazon’s playbook

With its massive global brand, loyal customer base, and the potential for category expansion, Airbnb isn’t just a recovery story — it’s a long-term compounder in the making.

4. Dollar General (DG)

Yes, it’s boring. But Dollar General is a quiet powerhouse in the discount retail space, and its 68% drop since late 2022 may be severely overdone.

Despite profit pressure, the core business is intact:

2024 net sales hit a record $40.6 billion, up 5% YoY
Customer traffic declined just 1%, showing shopper loyalty
Stock trades at only 16x earnings, offering deep value

Dollar General typically shines during economic uncertainty. As more consumers seek value, this discount chain could see a defensive rebound, making it a potentially smart buy for those looking beyond flashy growth names.

Don’t Miss the Window: These Stocks Won’t Stay Down Forever

Market corrections test investor discipline — but they also create windows of opportunity. The current pullbacks in Alphabet, Vistra, Dollar General, and Airbnb aren’t signs of weakness; they’re signals that strong businesses may be temporarily undervalued.

Each of these companies brings something unique to the table: