With Nasdaq Composite In the bearing market territory (marked by the index falling by more than 20% of its summit of all time), there is a certain panic on the market. Investors are concerned about the effect of consumer prices and prefer to be in more conservative investments than artificial intelligence (AI) actions, which are more upwards but with more risks.
However, this sale is short -sighted. Anyone who sells is currently one year, rather than the three to five years that individual investors should have. If you stretch your investment horizon longer, today’s equity prices do not seem as frightening; Instead, they look like an opportunity to buy.
So, if you can invest in the market now, here are three actions which, I think, are very likely to be worth much more in the coming years.
Investment in AI is mainly focused on the construction of AI infrastructure, which benefited companies as Manufacture of Taiwan semiconductors (NYSE: TSM),, Nvidia (Nasdaq: NVDA)And Broadcom (Nasdaq: Avgo). Each of these companies provides important components in the AI value chain, and they have also sold spectacular in recent weeks.
Broadcom is doing the worst, down more than 40% of its summits. Nvidia and TSMC are a little better, with around 35%. However, I do not think this is justified, because the AI arms race is greater than fellow prices.
When President Donald Trump announced prices on April 2, many were shocked by high rates. One of the highest rates has been taken from TaiwanAn amazing 32%. This could be a huge problem, because Taiwan Semiconductor is a ton of tokens for Nvidia and Broadcom (as well as many other companies) which would increase instantly due to the price. However, semiconductors are exempt from this rate, so it is not something that investors should worry at the moment.
However, with the height of some of the other prices, many fear that it seriously affects the consumer and obliges them to spend less money. Lots of AI hyperscalers (like Meta-platforms,, AlphabetAnd Amazon) Drift most of their income from consumer -oriented products through advertising or direct sales. If the consumer weakens, the basic activities of these three will also be injured.
This could Having them cut off what would be record capital budgets for this year, which were mainly to build data centers for the AI request. This is the theory of work to explain why actions like Taiwan Semi, Nvidia and Broadcom are broken down, but I do not think it is valid.
What investors forget is how massive these AI hyperscalers are. Although these prices probably affect their basic activity, the cash flows that these three generate, even with their company decreasing from 10% to 20%, is more than enough to finance their AI efforts. AI’s arms race is too important to win, and Amazon CEO Andy Jassy said that about the demand and construction of AI during the Amazon fourth quarter’s call conference:
We must get a data and equipment center and chips and networking equipment before our monetization. We only procure it if we see important signals of the request. And so, when AWS widens its capex, especially in what we think is one of these unique type of commercial opportunities like AI, I think it is in fact quite a good sign, long -term average, for the AWS company.
Jassy sees the request descending into the pipeline and Amazon must be ready for this. Although it may seem a little dark at the moment, in the next three to five years, the AI demand will be incredibly high, and these AI hyperscalers will have to strengthen the ability to achieve it today.
This augurs well for companies like Taiwan Semiconductor, Nvidia and Broadcom, which are each vital in the AI supply chain. Although the construction of the AI can decrease slightly this year due to prices affecting companies, there will always be strong growth, and these three will benefit. After the sale, these actions are all fairly cheap from the prices point of view (P / E) in the long term.
One thing to keep in mind when using the P / E front ratio is that it uses analyst projections to guide the part of the future benefits of the equation. Many analysts have not updated their profits by thinking of the prices. Most will probably wait until certain results of the first quarter are reported, as it will give them an idea of the place where demand could be directed.
Be that as it may, given the long -term rear winds on the data centers market, I think these prices are sufficiently attractive. The CEO of Nvidia thinks that capital expenses of the data center could reach $ 1 billion by 2028, which would be a huge boost for this trio if it is achieved. Huang is right at the request of AI for a long time, and the current weakness resembles an excellent opportunity to purchase for these three, as long as you have a long -term state of mind.
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John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of Motley Fool’s. Suzanne Frey, director of Alphabet, is a member of the board of directors of Motley Fool’s. Randi Zuckerberg, former Director of Development of the Facebook and Sister of the CEO of Meta Platforms, Mark Zuckerberg, is a member of the board of directors of Motley Fool’s. Keithen Drury A positions in Alphabet, Amazon, Broadcom, Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has positions and recommends the alphabet, Amazon, Meta Platforms, Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Word’s madman has a Disclosure policy.
