The Nasdaq , an index that had been surging over the past two years, did quite the opposite during much of March. The benchmark entered correction territory earlier in the month, indicating it dropped more than 10% from its peak in December. The cause of this change? Worries among investors rằng President Donald Trump's plan Implementing a sequence of import duties might adversely affect domestic expansion. Stocks focused on growth tend to be quite responsive to economic conditions; therefore, during times of doubt, these are typically among the first to decrease in value.
However, recently, the outlook has improved. President Trump’s most recent remarks indicate some willingness to adjust the enforcement of tariffs, which has led investors to become more optimistic about potential limitations on their effect on businesses and the overall economy. This renewed hope drove an upsurge in the Nasdaq, pulling it away from the correction territory early this week; nonetheless, the index has fluctuated since then.
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The Nasdaq has regained some ground from recent declines, yet numerous stocks remain attractively priced—or at worst, fairly valued—including those involved in the lucrative and rapidly expanding field of artificial intelligence (AI). Here are three top picks among AI-focused equities you might want to consider acquiring before their value climbs significantly higher.
1. Palantir Technologies
Palantir Technologies (NASDAQ: PLTR) The momentum appeared unrelenting until more recent periods. The AI software firm experienced the largest increase in value during this time. S&P 500 Last year, it surged by 340% and reached an all-time peak in February. Investors have shown enthusiasm due to the firm's robust double-digit revenue expansion across both its sectors: governmental and commercial.
Palantir offers these clients AI-powered platforms designed to assist them in collecting and effectively utilizing their data. These solutions frequently yield remarkable outcomes, enhancing productivity, controlling costs, and much more. What stands out for me is Palantir’s consistent ability to maintain a healthy equilibrium between expansion and profit generation, evidenced by the continuous rise in its Rule of 40 metric. Achieving a score above 40% signifies strong performance in both areas. With a current figure of 81%, Palantir undoubtedly demonstrates exceptional success in striking this balance.
Today, Palantir's future price/earnings-to-growth ( PEG) ratio A valuation metric that takes into account growth stands at 0.8. If this figure falls below 1, it could indicate that the stock might be undervalued. Following its 24% decline from the highest point, this seems like an excellent opportunity to invest.
2. Amazon
What I love about Amazon (NASDAQ: AMZN) is the detail that the firm is using AI to enhance its own operations and Amazon is leveraging AI-driven goods and solutions via its cloud computing division to fuel revenue expansion. Consequently, this major player in both online retail and cloud technology is harnessing AI throughout its business processes. This strategic approach has proven successful, reducing costs associated with serving customers in e-commerce and contributing significant additional revenues to their cloud profits.
I anticipate this trend will persist due to Amazon Web Services' (AWS) leadership in the cloud industry—it holds the number one spot worldwide—and the substantial predicted expansion of the AI sector. Additionally, we find ourselves at an initial phase where businesses are developing their own platforms. Applying AI to everyday operations isn’t yet commonplace across all enterprises. Therefore, AI has significant potential to fuel AWS’s growth over the coming years. Given that AWS constitutes the primary source of profits for Amazon, this development carries major implications.
Currently, Amazon’s shares are trading at 32 times future earnings projections, which is lower than the 45 times they were valued at a few months back — making it an attractive buy for this artificial intelligence stock poised to rise with any favorable AI-related updates.
3. Meta Platforms
Meta Platforms (NASDAQ: META) It is primarily recognized for its suite of applications that likely fill up your smartphone—ranging from Facebook and Messenger to WhatsApp and Instagram. Over 3.3 billion individuals utilize at least one of these platforms every day. This widespread presence in social media has enabled Meta to demonstrate its capabilities in artificial intelligence. In 2023, the company introduced Meta AI, which has since become the leading global AI assistant.
Meta aims to succeed in artificial intelligence by integrating it throughout its various platforms and refining AI-powered helpers to better cater to user demands. This strategy may encourage people to use Meta’s applications more frequently, which would then attract advertisers to allocate greater portions of their budgets towards these platforms to connect with audiences. To achieve this and other AI objectives, Meta is making substantial investments—upwards of $65 billion this year—to build extensive data centers and boost the quantity of AI-specific processors they possess. Additionally, the corporation has developed custom-designed AI technologies. large language model (Meta’s large language model) and has released it as open-source — a step that might cement Meta’s role as an frontrunner in the AI sector.
Currently, Meta's stock is trading at 24 times future earnings projections, which has dropped from its peak of 29 times a couple of weeks back—a great chance to buy since this emerging AI frontrunner might spike upward anytime now.
Is investing $1,000 in Palantir Technologies at this moment a good idea?
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John Mackey, who previously served as the CEO of Whole Foods Market—an entity now owned by Amazon—is part of The Motley Fool’s board of directors. Additionally, Randi Zuckerberg, formerly responsible for market development and communications at Facebook and sibling to Meta Platforms CEO Mark Zuckerberg, also sits on The Motley Fool’s board. Adria Cimino has investments in Amazon. The Motley Fool holds stakes in and endorses Amazon, Meta Platforms, and Palantir Technologies. The Motley Fool has a disclosure policy .