Stock Market Sell-Off: 2 AI Stocks to Buy Now According to Wall Street

In the face of economic uncertainty driven by trade policies, the U.S. stock market has encountered a significant downturn. The benchmark S&P 500 is down 14%, while the Nasdaq Composite has fallen by 19%. However, Wall Street remains optimistic about two standout stocks: Nvidia and Amazon. Both companies have received high buy ratings from analysts, making them attractive options for investors. Here's a closer look at why these AI stocks are worth considering.

Key Highlights

• Market Downturn: S&P 500 down 14%, Nasdaq down 19%.
• Analyst Confidence:
  • Nvidia: 90% buy ratings from 63 analysts.
  • Amazon: 95% buy ratings from 73 analysts.
• Potential Upside:
  • Nvidia: Target price of $170 (70% upside).
  • Amazon: Target price of $255 (47% upside).

1. Nvidia: Leading the AI Accelerator Market

Overview

Nvidia is a powerhouse in accelerated computing, specializing in technologies that enhance AI applications. Known for its graphics processing units (GPUs), the company holds a dominant position in the AI economy.

Market Position

• Market Share:

  • 84% in AI accelerators.
  • Over 50% in networking gear for generative AI workloads.

  Recent Challenges

• Nvidia has faced new export controls impacting its H20 GPUs in China, potentially affecting revenue by up to $18 billion this year.

  Future Potential

• Growth Forecast: Expected earnings growth of 38% annually through fiscal 2027.
• Valuation: Currently trading at 34 times earnings, which is considered attractive given its growth potential.

Investment Outlook

While shares may experience further fluctuations due to upcoming semiconductor tariffs, Nvidia's strong market position and growth prospects make it a compelling buy for long-term investors.

2. Amazon: A Multi-Faceted Growth Engine

Overview

Amazon is a leader in e-commerce, digital advertising, and cloud services. The company is leveraging AI to enhance revenue and operational efficiency across its platforms.

Growth Engines

• E-commerce: The largest online marketplace globally, optimizing logistics and product recommendations through AI.
• Cloud Services: Amazon Web Services (AWS) is the leading public cloud platform, continually integrating AI technologies.

AI Innovations

• Generative AI Applications: Amazon is developing around 1,000 applications to streamline operations and enhance customer experience.
• AWS Developments: Platforms like Bedrock for generative AI and custom chips for AI training (Trainium) and inference (Inferentia).

Investment Outlook

With shares currently 28% below their peak and a projected earnings increase of 16% annually through 2026, Amazon presents a solid investment opportunity. Although market sentiment is bearish due to tariff concerns, Amazon's strong fundamentals suggest it can outperform the S&P 500 in the coming years.

Conclusion

As the stock market navigates through volatility, Nvidia and Amazon stand out as strong AI investments backed by Wall Street's confidence. With their robust market positions and growth potential, these stocks could be excellent additions to a diversified portfolio for investors willing to look beyond short-term fluctuations.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research or consult a licensed financial advisor before making investment decisions.