Market Decline Reveals Tech Investment Opportunities

The recent stock market sell-off has created attractive buying opportunities, especially in the technology sector. Concerns about tariffs and the economy, intensified by President Donald Trump’s “Liberation Day” tariff announcements, have caused a significant dip in stock prices.

Historically, the stock market has rebounded from downturns, and many believe this pattern will continue. Here, we examine two leading tech companies that investors can consider during this market dip.

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Nvidia’s Position in AI and Tech

Nvidia (NASDAQ: NVDA) has seen its shares decrease by 24% this year due to worries about economic conditions and spending in AI infrastructure. Currently, the stock trades at a reasonable forward price-to-earnings ratio (P/E) of 24.

As a leader in AI chips, Nvidia’s graphic processing units (GPUs) serve as crucial components for AI infrastructure. Their GPUs excel in rapid data processing, making them essential for AI workloads. Additionally, their CUDA software platform creates a competitive edge by simplifying programming for various AI applications.

A central concern for investors is the sustainability of AI infrastructure spending. Nvidia estimates that data center capital expenditures (capex) could exceed $1 trillion by 2028. Major cloud computing firms like Meta Platforms, Amazon, and Alphabet are poised to invest heavily in AI data centers, with an anticipated expenditure of $257 billion this year. Furthermore, a consortium, including OpenAI and Softbank, plans to allocate $500 billion toward AI data centers under Project Stargate.

Consequently, Nvidia appears well-positioned to benefit from a continued increase in AI infrastructure spending.

To advance AI models, companies must enhance their computational power. This requires significantly more GPUs; for instance, Meta has increased its GPU usage tenfold for training its latest Llama model. Likewise, Elon Musk-backed xAI also utilized ten times as many GPUs for its Grok model. As long as firms strive to develop more sophisticated AI models and rely on cloud services for AI applications, the demand for Nvidia’s GPUs will likely remain strong. This makes Nvidia an appealing stock to consider at current price levels.

Image source: Getty Images

Investing in Meta Platforms’ Future

Meta Platforms is widely recognized for its social media and messaging applications, primarily Facebook and Instagram. However, the company is also making substantial investments in AI, including the development of its Llama AI model.

The Llama model has already begun to boost user engagement, resulting in prolonged usage of Meta’s platforms and improving advertising effectiveness. This was reflected in their Q4 results, which demonstrated a 6% increase in ad impressions and a 14% rise in average ad prices. These metrics indicate increased user interaction and elevated demand for ad placements.

Meta aims to develop Llama into a leading AI assistant, with Llama 4 promising agentic and multimodal capabilities. Agentic AI refers to AI that can perform tasks autonomously, while multimodal functionality means it can process various data types, including text, images, video, and audio.

In addition, Meta is expanding its next social media platform, Threads, which is rapidly growing its user base by adding approximately 1 million users daily. By the end of the year, Threads reached 320 million monthly active users.

Currently, Meta is focused on user acquisition and enhancing features within the Threads platform before monetization begins. This strategy aligns with its historical growth patterns, indicating that Threads could become a significant revenue driver as it matures.

With Meta’s stock down over 9% for the year, it now enjoys a forward P/E ratio of just 23 times the current year’s analyst estimates, presenting an attractive valuation for a top digital advertising firm currently experiencing solid growth.

Should You Invest $1,000 in Nvidia Now?

Before making any investment in stock of Nvidia, consider this:

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, serves on The Motley Fool’s board. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is also a board member. Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool endorses long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. A disclosure policy can be found on The Motley Fool’s website.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.