The silver strip in an otherwise stormy tech market
Shares for artificial intelligence (AI) have fueled the stock market profit in the past two years when investors AI consider the next groundbreaking technology to be one that could join discoveries such as electricity or developments such as the Internet.
In addition, investors felt optimistic about the overall economy. The Federal Reserve ended its interest rate increases and on the right track to reduce interest rates – and this happened. The central bank started interest in interest last autumn and stated that more would follow. Against this background, growth stocks also lifted benchmarks because these types of companies thrive in better economic environments – it is easier for them to expand, and their customers generally have more money for products and services.
All of this helped the Nasdaq to advance more than 43% in 2023 and to achieve an increase of 28% last year. But in the past few weeks this sunny market environment has become stormy. President Donald Trump announced the tariffs for imports, a step that weigh the prices, increased inflation higher and impair company results. As a result, the Nasdaq fell into the correction zone and fell by more than 10% compared to the last high in December. But here is the good news: Although the AI shares are currently falling, they still remain a silver strip in this stormy market. Here is the reason.
Image source: Getty Images.
First, a quick look at some of the losses we have seen lately. Nvidia(Nasdaq: NVDA)The world's leading AI chip maker fell by 15%last month. AI software company Palantir technologies Dropped 17% during this period; and AI language specialist Soundhound ai 12%lost. And the list continues …
Although these companies and technology and growth contacts are generally exposed to a headwind due to economic uncertainty or a possible slowdown, it is important to note that the AI prospects have not changed in the long term. Analysts forecast an annual annual growth rate of around 35% for the AI market by 2030 if they say that it will achieve more than 1 trillion dollar.
And we have some concrete evidence that could happen. Company of Meta platforms(Nasdaq: Meta) To alphabet(Nasdaq: Goog)(Nasdaq: Googl) have announced increased expenses to support your AI programs. Meta said it would spend up to 65 billion US dollars this year and plans to build a data center the size of a part of Manhattan. Alphabet said that capital expenditure of 75 billion US dollars is planning this year, and a large part of it will go to servers, data centers and networking.
The Trump administration even has the idea of increasing the AI and greeting the announcement of the Stargate project by Openaai and the obligation to support access to the necessary electricity levels. Stargate, founded by Openai and several technology and financial partners, will invest 500 billion US dollars in the next four years to build the AI infrastructure in the USA
After all, words from one of the largest authorities on AI also offer reason to be optimistic about long -term growth history. Jensen Huang, Chief Executive Officer from Nvidia, says that the expansion of the world center of $ 1 trillion and the demand for Nvidia's Chip Architecture Blackwell-a important step is to be exceeded in the accelerated computing-threatening of its recent introduction. These trends indicate higher growth, even if certain headwind temporarily reject sales or stock performance.
Now is a fantastic time to achieve promising long -term players, since today many fell under control to a bargain. For example, Nvidia is now estimated to have been 26 -forward profits in the lowest in about a year. The share has estimated between 40 and 50 times for most of the past year.
“But what if these players continue to lose weight?” You can ask. It is impossible to expect the market and get in at the lowest price. The best idea is to buy a share if the assessment looks cheap or reasonable. Even if it continues to decrease, this will not change your returns very much over time.
All of this means at the moment a good time to consider AI shares – a silver strip on today's stormy market – and bargains that could charge their portfolio in this permanent AI growth history.
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Suzanne Frey, manager at Alphabet, is a member of the Motley Fool Board of Directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of the Board of Directors of the Motley Fool Board of Directors. Adria Cimino has no position in one of the types mentioned. The Motley Fool has positions in and recommends Alphabet, Meta platforms, Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy.
AI shares: The silver strip in an otherwise stormy tech market was originally published by Motley Fool
