The U.S. equity market began 2025 on a positive note, with the S&P 500 index increasing nearly 2.8% in January 2025. Market sentiment was largely optimistic, fueled by strong earnings from artificial intelligence (AI)-powered companies and optimism about a resilient economy.
However, things have worsened, as growing geopolitical tensions, rising economic uncertainty, and the increasing probability of trade wars are affecting investor confidence. The Nasdaq Composite spent much of March in correction territory, 10% off its highs.
But this challenging period of market sell-offs also offers some of the best long-term buying opportunities, particularly for stocks of high-quality companies with sustainable competitive advantages and strong financials, as they trade at discounted prices.
Here’s my list of three top-notch AI-powered stocks that have become bargain buys.
Shares of Nvidia (NASDAQ: NVDA) have plummeted more than 20% from their recent high of $153 on Jan. 7, triggered mainly by worries about AI overspending and trade wars.
Despite this slump, the rapid pace of AI infrastructure buildout is the primary growth catalyst for Nvidia, a semiconductor giant accounting for almost 90% of the AI GPU market. With major technology companies gearing up to spend over $300 billion on AI technologies and data center buildouts in 2025, Nvidia’s AI GPUs and AI-optimized software solutions continue to be in high demand.
Demand for the recently launched Blackwell architecture systems is already surpassing supply. Designed mainly for inference workloads (deploying and running pre-trained large language models), including reasoning (a special inference use case),
Blackwell is well-suited for advanced models that utilize large amounts of computing power and perform complicated and multistep tasks. By focusing on the recurring inference workloads (compared to training workloads), Nvidia is now targeting a much larger addressable market.
Furthermore, Nvidia’s tightly integrated software ecosystem has a significant competitive advantage since it has helped create a sticky customer base by dramatically increasing clients’ switching costs.
Nvidia CEO Jensen Huang also announced plans to launch Rubin GPU, the successor to Blackwell GPUs, in the second half of 2027 in a speech at the recent GTC conference focused on AI development.
Despite the many pros, Nvidia is trading at a forward price-to-earnings ratio of 27.1, far lower than its five-year average of 72. Considering Nvidia’s enviable position in the rapidly expanding AI market and valuation correction, it seems an unmissable buying opportunity.
