Source: Spyro the Dragon / Shutterstock.com
Stock market corrections can present many long-term buying opportunities. artificial intelligence (A.I.) are typically hit hardest by these market changes.
Although sharp selloffs can scare new investors, experienced investors take advantage of these opportunities to invest in their favorite stocks. The lower the price, the more potential there is and the better the margin of safety for investors.
If any of these AI stocks are a buy on the market, you might want to take a closer look.
Super Micro (SMCI)
Source: GIGISTOCK / Shutterstock
super micro (NASDAQ:SMCI) is a leader in the AI industry and has rewarded long-term investors. The stock is up over 700% in the past year, and the five-year increase is over 4,459%.
Shares initially soared more than 10% after the company released an impressive earnings report. However, stock prices were unable to sustain most of the gains. The company has proven to be growing at a rapid pace as follows: Nvidia’s (NASDAQ:NVDA) Success in 2023.
For companies at the heart of high-growth industries, short-term weakness presents long-term buying opportunities. Supermicro provides servers that can handle the intense workloads of AI tools.
The company has achieved exceptional sales and net income growth, making the valuation attractive. The company’s stock currently trades at a forward P/E ratio of 35x, with a net cash position of $350.03 million.
Supermicro has been generating attractive profits, and it doesn’t look like that’s over just yet. The company should report exceptional growth rates over the next few quarters as AI gains momentum and the benchmarks for the company to exceed become lower.
Broadcom (AVGO)
Source: Sasima / Shutterstock.com
broadcom (NASDAQ:AVGO) is a semiconductor and software giant with strong profit margins while growing sales and bottom line. The stock is up 108% over the past year and 364% over the past five years.
Analysts are bullish on the stock, with 19 out of 20 rating it a “buy.” Two other analysts rated the stock as a “hold.” The highest price target is $1,550, suggesting 21.6% upside potential.
Broadcom’s acquisition of VMware is well known and will give the company a better position in the software sector. Semiconductor chips, especially AI chips, are the main focus, but the company’s software business also appears to be doing well.
Broadcom CEO Hock Tan made several comments in a press release detailing the acquisition.
“Together, we are well-positioned to help global enterprises adopt private and hybrid cloud environments to achieve more secure and resilient environments. We have a long track record of investing in acquired businesses to drive growth, and VMware will continue to do this for the benefit of the stakeholders we serve.”
Broadcom has delivered impressive results for shareholders over the years. Investors have reason to believe that Broadcom sees more potential within his VMware and will reward long-term investors.
Nvidia (NVDA)
Source: Evolf / Shutterstock.com
Nvidia’s market capitalization continues to soar. The company recently passed the $1 trillion milestone and is expected to have a market capitalization of more than $2 trillion by the end of 2024. The company currently has a market capitalization of $1.8 trillion and a forward P/E ratio of 34x.
The company’s GPU chips are gaining more traction thanks to AI, but they have a deeper history. Nvidia claims he invented his GPU chip in 1999. Although other chipmakers were making similar chips, Nvidia popularized the term “GPU.”
These chips helped Nvidia establish a large presence in the gaming industry. When introduced, Nvidia’s GPUs helped fuel the growth of the computer gaming market. More than 20 years later, the company ended its fiscal third quarter of 2024 with $2.86 billion in revenue from its gaming division. This number corresponds to a year-on-year growth rate of 81%.
AI growth is the main driver of Nvidia’s revenue. However, the company is neither AI nor bankrupt. Investors will have exposure to several high-growth business segments under Nvidia.
On the date of publication, Marc Guberti held long positions in SMCI, AVGO, and NVDA. The opinions expressed in this article are those of the writer and are influenced by InvestorPlace.com. Publication guidelines.
