The recent stock market sell-off is creating some nice buying entry points, particularly in the tech sector. Uncertainties surrounding tariffs and the economy, coupled with President Donald Trump's "Liberation Day" tariff announcements, pushed stocks down hard.
But never fear. Over the long term, the stock market should bounce back, as it always has. Let's look at two leading tech companies that investors can buy this month on this dip.
Nvidia
Concerns about the economy and artificial intelligence (AI) infrastructure spending have sent Nvidia (NVDA 2.91%) shares into the bargain bin, down 24% so far for the year including nearly 10% in the last week. The stock is trading at a more-than-reasonable forward price-to-earnings ratio (P/E) of 24.
NASDAQ: NVDA
Key Data Points
Nvidia is the clear market leader in the AI chip space, where its graphic processing units (GPUs) have become the backbone of AI infrastructure. GPUs are able to process data very quickly, which made them ideal for providing the processing power for AI workloads. Meanwhile, its CUDA software platform has helped create a wide moat for the company given the ease of use it allows developers to program its chips to handle various AI tasks.
The biggest question surrounding the stock is whether AI infrastructure spending will continue. For its part, the company sees data center capital expenditure (capex) reaching a whopping $1 trillion or more in 2028. Cloud computing companies Meta Platforms, Amazon, and Alphabet are still planning to spend heavily on AI data center capital expenditures, with analysts expecting $257 billion in spending this year. In addition, a group of companies led by OpenAI and Softbank plan to invest $500 billion in AI data centers over the next few years as part of Project Stargate.
So, Nvidia still looks to be positioned well as AI infrastructure spending continues to grow.
At this time, the only way to advance AI models is to increase the compute power on which AI models are trained. This means companies not only need more GPUs to train their AI model, but they need exponentially more to make them better. For example, Meta is using 10 times as many GPUs to train its latest Llama model versus its prior iteration. Elon Musk-backed xAI also used 10 times as many GPUs to train the most recent interaction of its Grok model.
As long as companies are trying to create more advanced AI models and using the services from cloud computing companies to create AI applications, the need for more GPUs will persist. This makes Nvidia an attractive stock to own down at these levels.
Image source: Getty Images
Meta Platforms
Meta Platforms is best known for its collection of social media and messaging apps, led by Facebook and Instagram. However, it's investing heavily in AI through the development of its Llama AI model.
Thus far, Llama has been helping improve user engagement, keeping users on Meta's social media apps longer, and helping advertisers improve their marketing campaigns. The impact of this could be seen in the company's Q4 results, where it saw a 6% increase in ad impressions and a 14% jump in average ad prices. The former speaks to users spending more time on its sites, leading to more ads, while the latter shows the improved effectiveness and demand for those ads.
NASDAQ: META
Key Data Points
Meta is looking to eventually have Llama become an overall leading AI assistant. It said that the release of Llama 4 will give its AI model will have both agentic and multimodal functionality. Agentic AI is when AI agents can go out and perform tasks on a user's behalf, while multimodal means it can understand different data inputs, such as text, images, video, and audio.
In addition, the company is in the process of building out its next social media platform called Threads. The platform has been growing its user base quickly, adding about 1 million users a day. Threads had 320 million monthly active users at year-end.
Right now, Meta is just in the process of increasing users and adding new features to the Threads platform. It has not yet tried to monetize it through ads. This is the company's typical playbook, and Threads should be a nice growth driver once the platform gains scale and Meta begins its monetization efforts.
With the stock down more than 9% so far this year, Meta now trades at a forward P/E of only 23 times current-year analyst estimates. That's an attractive valuation for one of the world's leading digital advertising companies that is seeing strong growth.
