The Nasdaq Composite is in bear market territory, sparking panic among investors. However, some experts argue that this selling is short-sighted, and AI stocks may be undervalued. The key to understanding the situation lies in recognizing that the AI arms race is a long-term focus, not a short-term one.
While tariffs have affected companies like Taiwan Semiconductor Manufacturing (TSM), Nvidia (NVDA), and Broadcom (AVGO), these stocks still hold significant value. They are vital components in the AI supply chain and will benefit from strong growth over the next three to five years.
Nvidia CEO Jensen Huang has predicted that data center capital expenditures could reach $1 trillion by 2028, providing a huge boost for companies like Nvidia. The Motley Fool’s Stock Advisor analyst team recommends considering investments in these stocks, despite their current weakness.
Investors should keep in mind that the forward price-to-earnings (P/E) ratio may not accurately reflect earnings projections due to delayed updates from analysts. Nevertheless, with a long-term mindset and considering the growing demand for AI, these stocks appear attractive at current prices.
This opportunity highlights the importance of understanding the broader context of market fluctuations and focusing on long-term growth prospects.
Source: https://www.nasdaq.com/articles/nasdaq-bear-market-3-no-brainer-artificial-intelligence-ai-stocks-buy-april