The market’s enthusiasm for artificial intelligence (AI) and its growth potential has been thrown into doubt, at least for now, by tariff drama stemming from the Trump administration’s recent policy announcements. The market initially plunged, flirting with a technical bear market after touching all-time highs just months ago, then recovered some of the losses after President Donald Trump said most of his tariff plan was on hold for three months.
Could stocks continue going lower? Of course, but these moments have historically been remarkable long-term buying opportunities for high-quality stocks.
Artificial intelligence (AI) could be a multitrillion-dollar opportunity 10 years from now. Here are four “Magnificent Seven” stocks poised to lead the AI field that have become compelling values after their recent declines. Buying and holding them could prove lucrative during the next decade.
1. Nvidia
Semiconductors are the building blocks of technology and AI. Nvidia (NVDA 18.34%) has become the runaway leader in AI data center GPU chips, with some pegging its market share at more than 90%. That’s a dominance that’s hard to sustain, but the companies investing billions of dollars to build AI data centers have by and large chosen to use Nvidia’s hardware. The early success of Blackwell, Nvidia’s latest AI chip architecture, underlines the competitive moat the company has dug. The AI opportunity will eventually expand beyond data centers, and Nvidia should be ready.
The company is developing hardware and software for adjacent industries, such as autonomous vehicles and robotics. New technologies and more intelligent AI models could continue driving demand for more (and better) chips, even if models become more efficient. Analysts estimate that Nvidia’s earnings will grow by an average of 37% annually over the long term. Meanwhile, Nvidia’s recent slide has nearly halved the stock’s price-to-earnings (P/E) ratio to less than 35. The resulting price/earnings-to-growth (PEG) ratio of less than 1, is a bargain for AI’s undisputed semiconductor leader.
2. Microsoft
Technology conglomerate Microsoft (MSFT 10.07%) has deep roots in enterprise software. Businesses worldwide depend on Microsoft’s productivity software, Windows operating system, and Azure cloud computing platform, which gives Microsoft an inside track for selling AI applications and cloud services. Microsoft has long been a diversified, do-it-all technology stock. Now valued at $2.9 trillion, it’s probably too big to make you rich overnight, but it might be the most dependable AI stock you can buy.
Microsoft has paid and raised its dividend for 23 consecutive years, and the business has a perfect AAA credit rating — one of just two U.S. companies that can say that. Microsoft should continue to grow as it funnels AI demand through Azure. Analysts estimate the company’s earnings will grow by an average of 12% annually over the long term. The stock’s P/E ratio topped 37 a few months ago but has dropped to 29. The resulting PEG ratio (2.4) makes Microsoft a solid long-term buy at these levels and would become increasingly attractive if the shares slide further.
3. Amazon
Like Microsoft, Amazon (AMZN 11.98%) will enjoy cloud computing growth as companies develop and deploy AI agents and other software applications. Amazon Web Services, or AWS, is the world’s leading cloud platform, accounting for about 30% of the market. AWS is Amazon’s primary profit center, so that should be music to shareholders’ ears. Plus, Amazon, the dominant U.S. online retailer, could benefit if AI can eventually lower costs throughout the company’s supply chain.
Amazon’s primary AI opportunity is in the cloud, and its core e-commerce business should continue to grow because web commerce is still only 16% of total retail spending in the U.S. On top of that, Amazon is renowned for pursuing new opportunities. Its efforts in digital ads, video streaming, telehealth, and smart home devices could blossom during the next 10 years. The total package makes Amazon a strong buy at its current 1.5 PEG ratio, resulting from its P/E ratio sliding to 32 and its estimated long-term earnings growth rate of almost 21%.
4. Meta Platforms
Social media juggernaut Meta Platforms (META 14.45%) might be the world’s most powerful advertising company. Its family of apps, including Facebook, Instagram, WhatsApp, and Threads, combine for a jaw-dropping 3.35 billion daily active users. Meta generates tens of billions of dollars in cash flow by advertising to its user base. This golden goose has funded the company’s hefty investments in AI and data centers.
Meta developed and open-sourced its AI model, Llama, which has racked up more than a billion downloads. The company is also pushing to break free from smartphones with a new generation of personal electronics, including the Meta Quest headset and AI glasses. Reality Labs, Meta’s AI unit, isn’t profitable yet, but it can be a game changer as it monetizes AI more during the next decade. The stock has fallen to a P/E ratio of 21, a great value if the business increases earnings by 17% annually over the long term, as analysts expect.
Financial Market Newsflash
No financial news published today. Check back later.
