Worried About a September Correction? 2 Smart Stocks to Rotate Into

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After the shaky start of the month, it seems like a September correction will be difficult to avoid. Whether you're off-put by the potential "double top" technical pattern in the S&P 500 that looks like it could be in the works, recent selling by Warren Buffett and Michael Burry , or extended valuations on defensive stocks bid higher amid early turbulence in the tech scene, it seems like a lot of red lights are flashing as we progress through a period of seasonal anxiety.

Simply put, there's no shortage of things to sell your stocks over. Even long-time bull and fairly accurate Fundstrat market strategist Tom Lee thinks the next seven weeks could see a pullback in the range of 7-10%. Despite emphasizing caution for the next two months, Lee thinks any such correction could precede a rather sharp V-shaped recovery into year's end. I would not bet against Lee. Not with his track record.

So, if you're looking to play near-term pain but seek a bargain on the way down over the coming weeks, you've come to the right place. In this piece, we'll look at two stocks that make sense to rotate into as the market takes a pitstop after a speedy first-half run.

• Berkshire and Salesforce are two intriguing names that could stand tall as markets correct.
• Though not completely secure from downside, the following two stocks seem like a great deals right here and now.
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Berkshire Hathaway ( NYSE:BRK-B ) seems like a fantastic low-tech defensive play to rotate into if you think most of the damage of the next correction will be concentrated in AI stocks. Indeed, it's hard to believe that recent semiconductor volatility will conclude as demand for AI hardware takes a bit of a breather. In any case, Berkshire stands to benefit from AI, even if it's not actively backing up the truck on the latest AI accelerators.

Notably, various Berkshire businesses stand to be made more optimal as the firm explores automation opportunities while using its trove of data more effectively. And, of course, Berkshire's investment in Apple ( NASDAQ:AAPL ) makes it a quiet winner in the AI phone revolution.

Though the firm has cut its stake by over half, Apple remains Berkshire's top public holding. Perhaps a continuation of the tech correction could allow Berkshire to buy more at markedly lower prices. Either way, Berkshire has plenty of cash to seize opportunities as they come along.

With BRK-B shares down around 4% from its peak and its $1 trillion valuation, perhaps it's time to nibble a few shares. The stock still goes for a historically rich 1.65 times price-to-book (P/B) multiple. But given its financial flexibility in a potentially falling market, the stock looks worth the premium.

Salesforce ( NYSE:CRM ) is an AI innovator and cloud pioneer that will probably get slammed as tech does. However, I view the misunderstood enterprise software company as deserving of a pass should weakness continue to weigh down the rest of tech. Why? The stock's already in a vicious bear market, down around 23% from its all-time high. Further, the company's M&A moves to enhance its AI portfolio seem to have gone mostly under the radar.

Sure, AI deals aren't as exciting anymore as investors focus a little more on return on investment. And though Salesforce acquisition announcements have been met with negativity, I do think investors seeking a slow-and-steady AI company that has a shot at disrupting enterprise software should stick with the name. More recently, Salesforce has been on an AI-fuelled acquisition spree, buying up AI voice agent developer Tenyx, Israel-based AI data analysis firm Bonobo AI, and data protection firm Own.

These are smaller tuck-in deals, but they strengthen Salesforce's chances of pulling ahead in the AI race. As the firm looks to go big on AI agents, perhaps Salesforce is one of the tech stars that can achieve AGI (artificial general intelligence).

In any case, CRM stock looks cheap relative to its growth at 24.75 times forward price-to-earnings (P/E). If you believe in Marc Benioff and the power of AI in the workplace, CRM stock seems like one of the better deals in AI.

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