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Nasdaq Sell-Off: 2 AI Stocks That Are on Sale in 2025
NDAQNasdaq(NDAQ) The Motley Fool·2025-03-15 22:12

Core Viewpoint - The current market volatility presents a potential buying opportunity for fundamentally strong Nasdaq stocks, particularly Nvidia and Microsoft, which have experienced significant corrections [2]. Nvidia - Nvidia reported a strong fiscal 2025 performance with revenue growing 114% year over year to 130.5billionandoperatingincomerising147130.5 billion and operating income rising 147% to 81.5 billion [3]. - The Blackwell architecture chips are a major growth catalyst, contributing 11billioninsalesinthefourthquarter,optimizedforinferenceandreasoningworkloadswithsignificantlyimprovedperformancemetrics[4][5].−NvidiaholdsadominantpositioninthedatacenterGPUmarketwitha9211 billion in sales in the fourth quarter, optimized for inference and reasoning workloads with significantly improved performance metrics [4][5]. - Nvidia holds a dominant position in the data center GPU market with a 92% share in 2024, supported by its CUDA software stack, which creates a strong competitive moat [6][7]. - Despite the strong fundamentals, Nvidia's shares have declined nearly 28% from their 52-week high due to decelerating data center growth and macroeconomic challenges [8]. - The stock is currently trading at under 20 times sales and 36.4 times trailing-12-month earnings, with a PEG ratio of 0.25, indicating a potentially attractive valuation given its growth prospects [9]. Microsoft - Microsoft shares have decreased by about 10% in 2025, creating an attractive entry point for investors [10]. - The company reported a 12% year-over-year revenue increase to 69.6 billion and a 10% rise in net income to 24.1billionforthesecondquarteroffiscal2025[11].−MicrosoftispositionedtobenefitfromJevonsParadox,withincreaseddemandforAIhardwareandsoftwaredrivenbyitsstrategicpartnershipwithOpenAI[12].−Commercialbookingsroseby6724.1 billion for the second quarter of fiscal 2025 [11]. - Microsoft is positioned to benefit from Jevons Paradox, with increased demand for AI hardware and software driven by its strategic partnership with OpenAI [12]. - Commercial bookings rose by 67% year over year, largely due to Azure commitments from OpenAI, enhancing Microsoft's cloud platform attractiveness [13]. - The company is leading in the agentic AI space with its CoPilot offerings, which are gaining strong adoption across enterprises [14]. - Microsoft's shares trade at just over 30 times trailing-12-month earnings, which is lower than its historical average, and the company returned 9.7 billion to shareholders in the second quarter [15][16].