The actions of artificial intelligence (AI) marked massive victories for investors last year and led the Nasdaq to a two -digit gain. This momentum continued at the beginning of 2025, but in recent weeks, these formerly the most efficient actions have had trouble.
The concerns of investors concerning the economy and the potential impact of President Donald Trump prices on imports Of Canada, China and Mexico have weighed on actions – in particular those of high -growth companies. All this motivated the Nasdaq Composite (^ Ixic -1.96%)) in correction territory. Last week, the index dropped by more than 10% of its last peak in December.
But experienced investors know that in these difficult times, good deals are increasing. The decreases of the major names of the AI mean that some are a flight at the moment – and this indicates an excellent purchase opportunity.
It is important to remember that uncertainty about the economy can be a problem today, but that does not change the long -term positive perspectives for AI. The AI market of $ 200 billion today is expected to reach $ 1 Billion by the end of the decade, which could generate explosive growth for certain AI companies.
Two winning companies that probably have more to win Nvidia (Nvda -0.14%)) And Advanced micro-apparents (Dmla -2.66%)). These giants of the AI chip have each seen their assessments flow lately and fell into territory of good deals. What is the best purchase in the correction of the Nasdaq?
Image source: Getty Images.
The case for NVIDIA
Nvidia dominates the AI flea market, holding an 80%share. Society Graphic processing units (GPU) Perhaps the most expensive, but also offer the highest performances – something that has enabled the largest technological companies in the world to flatter for Nvidia. For example, the demand for the latest version of the technology giant, The Blackwell Architecture, has exceeded the supply.
All this resulted in solid growth for Nvidia throughout this IA arrow. Quarter after quarter, the company has generated growth in two -digit income or three figures and income has reached record levels. During the most recent period, quarterly income increased by 78% to a record of $ 39 billion, and annual income increased by a record of $ 130 billion by 114%.
Some investors fear that the high price of NVIDIA GPUs can put the brakes on growth at some point, especially since competitors develop better products and better products. But the accent put by Nvidia on innovation, with a commitment to update its GPUs each year, could make very difficult for competitors to obtain a large market share.
Given all of this, Nvidia, merchant for 25x Extreme profits estimates – down 50x earlier this year – Buy cheap dirt for the long -term investor.
The case for AMD
AMD is the second largest player in the IA flea market. However, with a market share of around 10%, its history of AI growth has not been so explosive Nvidia. The company manufactures GPUs to feed the workloads of the AI and is known to provide solid performance at a reasonable price. It is great because it gives customers aware of the costs a quality option, which could lead more and more orders as the AI chip needs increase.
Even if large technological companies, as MicrosoftFlowing to NVIDIA for GPUs, they are also AMD customers. Microsoft, for example, uses MI300X headlights from AMD to control several co -pilot services based on GPT 4.
AMD aims to follow Nvidia by also launching innovations on an annual basis. Even if Nvidia is likely to stay in advance, AMD could still generate massive growth by applying this strategy.
AMD called “transformer” for the company last year as it progressed on the AI market. In the fourth quarter, the income from the company’s data center jumped 69% for a record of $ 3.9 billion; For the year, it climbed 94% to a record of $ 12.6 billion.
Like Nvidia, AMD saw its assessment Tumbles recently and offers an interesting purchasing opportunity. It is now negotiated for 21x -term profits estimates, more than 27 times in January.
Which one is the best purchase?
As mentioned, the two companies are excellent Additions to an AI walletBut if I could only choose one to buy during this Nasdaq correction, I would go for Nvidia. The company has a solid footprint on its market position and a plan – an emphasis on innovation – to maintain this long -term leadership. All this should result in many years of profits.
Given the recent drop in NVIDIA’s evaluation, is now like at the ideal time to participate in this AI winner who has what it takes to extend his winning pathways in the future.
Adria Cimino Has no position in the actions mentioned. The Motley Fool has positions and recommends micro advanced devices, Microsoft and Nvidia. The Motley Fool recommends the following options: Long January 2026 Calls $ 395 on Microsoft and Court January 2026 405 $ calls Microsoft. The Word’s madman has a Disclosure policy.