Microsoft(MSFT) The Motley Fool·2025-03-21 07:30Core Viewpoint - Artificial intelligence stocks, particularly Nvidia and Microsoft, have faced declines due to recession fears and tariffs, but analysts believe they are oversold and present potential investment opportunities [1]. Nvidia - Nvidia's GPUs are essential for advanced AI systems, and the company is a leader in AI infrastructure [2]. - The stock is currently 21% below its peak, influenced by concerns over competition and export restrictions, with revenue from China projected to drop from 21% in fiscal 2023 to 13% in fiscal 2025 [3][4]. - Despite these challenges, Nvidia is launching new products like Blackwell GPUs and has a strong growth outlook, with AI spending expected to rise 36% annually through 2030 [5][6]. - Wall Street anticipates Nvidia's earnings to grow at 39% annually through fiscal 2027, making its current valuation of 39 times earnings appear attractive [6]. - Analysts have set a 12-month target price of 118 [9]. Microsoft - Microsoft is positioned at the center of growing enterprise software and cloud computing markets, with expected sales growth of 12% and 21% annually, respectively, through 2030 [7]. - The stock has declined 17% from its July peak, with concerns about overspending on AI initiatives [8]. - Microsoft's AI business has achieved an annual revenue run rate of 550 for Microsoft, suggesting a 42% upside from its current price of $386 [9].