The Nasdaq, an index that has led the stock market gains over the last two years, recently entered correction territory. After falling more than 10% from its peak on December 16th, many investors are looking for promising opportunities. The shift away from growth stocks, including artificial intelligence (AI) companies, is largely due to concerns about President Trump’s trade policies and their potential impact on the economy.
While it may seem risky to invest in growth companies during uncertain times, history shows that the Nasdaq consistently recovers and grows after market downturns. Buying into high-quality stocks at this point could provide significant long-term returns. With the recent declines, many AI stocks are trading at bargain prices. I’ve compiled a list of five top AI stocks to consider in the current Nasdaq correction.
Top AI Stocks to Consider Now
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Nvidia (NVDA): Nvidia is the leading stock to gain exposure to the AI market. Forecasts predict the AI market will surpass $1 trillion by the end of the decade. Nvidia leads the AI chip market and offers a comprehensive portfolio of products. This has translated into impressive revenue growth with profit margins exceeding 70% on sales. Nvidia shares are currently trading at 27 times forward earnings estimates, down from 50 earlier this year, making it a golden long-term investment opportunity.
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Palantir Technologies (PLTR): Palantir Technologies helps customers use their data more effectively through an AI-driven platform. The Artificial Intelligence Platform (AIP) helps customers increase efficiency and make strategic decisions. While the company has historically focused on government contracts, its commercial business is now growing rapidly. Despite recent market volatility, Palantir’s long-term prospects in both commercial and government markets look bright, and a forward PEG ratio under 1 suggests it’s not overvalued.
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Alphabet (GOOG) (GOOGL): Alphabet is leveraging AI to improve its Google Search platform, which generates billions in revenue. Its own large language model (LLM), Gemini, improves search results and the experience for advertisers. Gemini also drives growth in Google Cloud, which saw a 30% revenue increase in the most recent quarter, reaching $12 billion. Customers are adopting Google Cloud for their AI platforms, and since the industry is still developing, this trend is likely to continue. Alphabet is the cheapest of the “Magnificent Seven” tech stocks, trading at only 18 times forward earnings estimates.
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Broadcom (AVGO): Broadcom is a networking giant that sells thousands of connectivity products used in various settings. Demand from AI customers has significantly increased its revenue. In the latest quarter, Broadcom’s AI revenue rose by 77% to over $4 billion, and the infrastructure software revenue jumped by 47% to 6.7 billion. The company anticipates continued strong demand, working closely with major cloud service providers. Broadcom, which currently trades at 29 times forward earnings is down from over 36 earlier, offering a solid entry point for investors.
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Amazon (AMZN): AI is boosting earnings at Amazon’s e-commerce and cloud computing giant, Amazon. The company uses AI throughout its e-commerce business. In its cloud computing unit Amazon Web Services (AWS), it offers a diverse portfolio of AI products and services, which helped AWS reach an annual revenue run rate of $115 billion last year. Amazon caters to all potential AI customers. AWS offers premium Nvidia chips and in-house-designed chips for the cost-conscious customer. It also offers a managed service called Amazon Bedrock. At 31 times forward earnings estimates, down from 45 last year, it is a great buy.
