There’s a lot of understandable concern in the market right now. Tariff uncertainty and worries that rising prices could lead to an economic slowdown are pushing share prices down across nearly every sector, artificial intelligence (AI) stocks included.
While it’s important not to dismiss real problems that might be on the horizon, it’s just as crucial for long-term investors to look at stocks they want and ask themselves, “Is this a potential buying opportunity?”
For some AI stocks that have tumbled over the past few months, the answer is “yes.” That means opening a position or adding to one could be a smart move. Here are two artificial intelligence stocks that investors might want to consider right now.
Image source: Getty Images.
1. Alphabet: This tech giant still looks like a long-term winner
When ChatGPT burst onto the scene, it seemed to catch Alphabet (GOOGL 1.37%) (GOOG 1.49%) off guard. All of a sudden, another tool that could provide people with useful information more easily than searching online was readily available.
Alphabet quickly shifted strategies to compete, rolling out new AI features embedded into its search tools. Most recently, it introduced an AI mode for search that expands its capabilities with more advanced reasoning that’s better at follow-up questions. The company also continues to build out its Gemini chatbot, integrating its services into Google Workspace, and offering AI as part of its premium services.
The latest version of Gemini is a good indicator that Alphabet is building its chatbot to be a leading player in the emerging AI agent space. Some estimates put the market size of AI agents at nearly $197 billion by 2034, and Nvidia CEO Jensen Huang has said that it will become a “multitrillion-dollar opportunity” in the coming years.
Alphabet is also investing $65 billion to build new data centers to continue expanding its AI cloud footprint. While it trails Amazon and Microsoft, Google Cloud is still the third-largest cloud player, and its growing market share comes at a time when AI cloud sales are expected to surge to $2 trillion by 2030.
Despite all of this, the stock’s price is down 20% over the past three months. That drop is mostly due to tariff concerns and not because of Alphabet’s underlying businesses. The decline means that the stock has a price-to-earnings (P/E) multiple of just 19.7, far cheaper than many of its tech peers and even lower than the S&P 500‘s P/E of 26.5.
2. TSMC: Nearly single-handedly building AI’s future
It might sound a little dramatic, but the dominance that Taiwan Semiconductor Manufacturing (TSM -0.41%) has in chip production means it is almost entirely building AI’s future because the company manufactures an estimated 90% of the world’s AI processors.
A ramp-up in AI data center spending is fueling the growth of Taiwan Semiconductor Manufacturing (also known as TSMC), with 2024 sales jumping 30% to $90 billion. Management hinted that there’s no reason to believe this will slow down anytime soon, and it expects AI revenue to double in 2025.
Some AI naysayers think there won’t be as much chip demand in the coming years as there has been recently, but with TSMC’s dominance in advanced processor manufacturing, there’s likely little long-term concern. Large tech companies are too afraid of falling behind in AI right now, and as AI services expand and improve, they will probably need more processors to achieve their goals.
Like other tech stocks, TSMC has felt the share-price pinch lately and is down 20% over the past three months. That’s an opportunity for investors who believe AI is just getting started and are looking to own one of the most important players in this space.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
