Key Points
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In late March, the Nasdaq Composite (NASDAQ: ^IXIC) fell roughly 10% from its prior highs, officially crossing into correction territory.
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Despite macro uncertainties like inflation and geopolitical tensions, AI infrastructure spending remains strong, with big tech investing $720 billion in capital expenditures.
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Micron Technology (NASDAQ: MU) is expected to quadruple earnings per share this year, while Broadcom (NASDAQ: AVGO) trades at about 50% off its highs.
The Nasdaq Composite officially entered correction territory in late March 2023 as the index declined approximately 10% due to factors such as renewed tariff anxieties, geopolitical tensions, and inflation. This market condition presents a potential buying opportunity for long-term investors, especially in the AI sector.
AI infrastructure spending continues unabated, bolstered by a $720 billion capital expenditure from major tech companies. Micron Technology is highlighted for its critical role in AI, producing high-bandwidth memory necessary for large language models, while Broadcom designs specialized AI chips. Micron’s expected earnings per share growth of quadruple this year contrasts with its current valuation, which is markedly lower than other AI chipmakers.
Broadcom, trading at approximately 28 times forward earnings, benefits from long-term commitments with its clients, providing a stable revenue stream and positioning it well in the rapidly growing AI ecosystem.
