Three Promising AI Stocks to Consider Amid Tech Market Pullback

Artificial intelligence (AI) is emerging as a transformative technology, still in its early stages. Recently, the tech sector’s downturn has created opportunities for investors looking for bargains among key AI players.

Here are three AI stocks that currently stand out as excellent buying opportunities.

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1. Nvidia

Nvidia (NASDAQ: NVDA) has become synonymous with AI, thanks to its leading hardware, which has positioned it among the largest companies globally. However, the recent tech sell-off hit Nvidia particularly hard.

Despite this setback, Nvidia’s fundamentals remain strong. It specializes in graphic processing units (GPUs), which are crucial for training AI models and running AI inference, owing to their exceptional parallel processing capabilities. Originally designed for enhancing video game graphics, Nvidia’s CUDA software platform allows developers to efficiently program its GPUs for various applications, further solidifying its market dominance.

Due to its 90% market share in the GPU sector and increasing investment in AI infrastructure, Nvidia is well-positioned for continued growth. As cloud providers expand their AI processing capacities, and AI model developers seek more computing power, expectations suggest Nvidia could see substantial growth in 2025.

The recent dip in Nvidia’s stock has improved its valuation. Currently, it trades at a forward price-to-earnings (P/E) ratio of 25 based on 2025 analyst estimates, with a price/earnings-to-growth (PEG) ratio of under 0.5, typically viewed as an indicator of undervaluation.

Image source: Getty Images

2. Alphabet

Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) currently trades at a forward P/E ratio of 18.5 and has been overlooked along with several other AI stocks. Yet, Alphabet boasts a strong portfolio of leading and emerging businesses.

Its cloud computing division is growing rapidly, driven by heightened demand for AI services. Last quarter, the unit’s revenue surged 30%, bolstered by enhanced profitability. Furthermore, Alphabet has developed custom AI chips, in collaboration with Broadcom, which are expected to enhance performance and reduce costs in AI processing.

With the introduction of the new Gemini 2.0 AI model, Alphabet plans to enhance its offerings across its businesses, including Google Search, aiming to serve more relevant results and optimize AI interactions.

Although concerns linger about the impact of AI chatbots like ChatGPT on traditional search engines, Alphabet’s history shows that only about 20% of queries are monetized through ads. New advertising opportunities linked to AI-generated results may allow Alphabet to better monetize the remaining searches.

3. Salesforce

Salesforce (NYSE: CRM) has established itself as a leader in customer relationship management (CRM) software, expanding into automation, analytics, and employee communication through acquisitions like Mulesoft, Tableau, and Slack. Now, it’s focusing on agentic AI as a potential growth driver.

Unlike generative AI programs that require user prompts, agentic AI will develop AI agents capable of performing a range of tasks with minimal human oversight. Salesforce is launching its Agentforce product, designed to encapsulate this technology.

Introduced just last month, Agentforce has already secured 5,000 deals, including 3,000 paying contracts. The product provides preconfigured AI agents for specific tasks, such as customer service, and offers no-code tools for clients to customize their agents.

Valued at a forward P/E of 26, Salesforce’s stock remains attractive, given the high demand for recurring revenue typically seen in software-as-a-service businesses.

Your Chance for Potential Investment Opportunity

Have you ever felt like you missed out on investing in major stocks? Now may be your chance.

Occasionally, our expert analysts issue a “Double Down” Stock recommendation for insights on companies poised for growth. If you’re worried you’ve already missed your chance, now is a strategic moment to make a move before conditions change. The data speaks volumes:

• Nvidia: A $1,000 investment when we recommended it in 2009 would now be worth $286,710!*
• Apple: A $1,000 investment in 2008 would be worth $44,617!*
• Netflix: A $1,000 investment in 2004 would equate to $488,792!*

We are currently issuing “Double Down” alerts for three remarkable companies—don’t miss your chance!

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*Stock Advisor returns as of March 3, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has positions in Alphabet and Salesforce. The Motley Fool has positions in and recommends Alphabet, Nvidia, and Salesforce. The Motley Fool has a disclosure policy.

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