Market Overview: Key Investment Picks Amidst Turmoil
This year has presented unexpected challenges in the markets. If someone observed the S&P 500 (SNPINDEX: ^GSPC) only from January 1 to June, they might assume it was unremarkable. However, ongoing tariff changes have generated significant market fluctuations, leading to overall gains when tariffs were reduced.
Top Stocks for Investment in June
Despite the volatility, several stocks stand out as promising investments for June. Specifically, Taiwan Semiconductor Manufacturing (NYSE: TSM), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Nvidia (NASDAQ: NVDA) represent significant opportunities, particularly in the booming artificial intelligence (AI) sector.
Nvidia’s Continued Dominance
Nvidia has emerged as a leader in 2023, thanks to its graphics processing units (GPUs) that are essential for the AI revolution. These GPUs excel in parallel processing, and the integration of thousands into supercomputer clusters enables rapid AI model training.
In Q1 FY 2026 (ended April 28), Nvidia reported a 69% year-over-year revenue increase. Although U.S. government restrictions on chip sales to China affected them, their overall performance indicates sustained growth.
At its 2025 GTC event, Nvidia mentioned a third-party estimate predicting data center capital expenditures will grow from $400 billion in 2024 to $1 trillion by 2028. Should this projection materialize, Nvidia will likely continue on its growth trajectory.
Insights on Taiwan Semiconductor Manufacturing
Taiwan Semiconductor Manufacturing (TSMC) is a primary supplier for Nvidia and various tech companies. Its superior chip fabrication capabilities make it a preferred choice for innovative firms.
TSMC’s neutrality allows it to serve competing companies, and orders are made years in advance, offering a clear outlook for future demand. It anticipates a 45% compound annual growth rate (CAGR) in AI-related revenue over five years, with overall revenue expected to grow at nearly 20% CAGR. TSMC’s stock also presents a favorable valuation, trading at 21.2 times forward earnings compared to the S&P 500 at 22.1 times.
Alphabet’s Stable Growth Amid Challenges
Despite economic headwinds, Alphabet remains a strong value play with potential for growth. In Q1, its revenue rose 12%, and diluted earnings per share increased by 49%.
Alphabet faces three main challenges:
- AI significantly impacting its search operations.
- A potential slowdown in advertising revenue due to economic conditions.
- Uncertainties related to possible government actions against the company.
The impact of these issues is uncertain, especially concerning the government actions, which will take time to resolve. Historically, Alphabet has rebounded well after economic slowdowns, making these challenges potentially temporary.
Notably, Google Search revenue grew by 10% in Q1, indicating that Alphabet’s core business remains robust despite the rise of generative AI.
Alphabet shares are currently trading for under 18 times forward earnings, providing an attractive buying opportunity.
Considerations for Investing in Nvidia
Before investing in Nvidia, it’s crucial to note that its potential is currently being assessed. Analysts have identified ten alternative stocks that are expected to yield significant returns in coming years.
Investors should closely evaluate their options as the market landscape evolves.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
