With the Nasdaq Composite in correction territory, investors should consider investing some cash in the stock market. Corrections are defined as a decline of 10% from an all-time high, but they occur fairly often (just over every year since 1980). Sometimes, these corrections turn into bear markets, but other times, they reverse and go higher, and I believe the latter is more likely.
As a result, I'm looking at stocks I can buy now to take advantage of the sell-off, and I've come up with five fantastic options that you'll regret not scooping up for dirt cheap prices now.
AI hardware providers: Nvidia and Broadcom
Some investors think a reversal of artificial intelligence (AI) hype is causing this correction, similar to how the dot-com bubble burst back in 2000 (basically 25 years ago to the day), but I think that's a bad assumption.
While AI and the internet are having a similar effect on how our lives are changing, AI companies are much different than the internet companies that crashed. For one, they make huge profits and have a reasonable business model.
There are billions of investment dollars flowing into AI-related hardware because many companies see where the world is heading. As a result, companies like Nvidia (NVDA +0.19%) and Broadcom (AVGO 1.74%) are huge beneficiaries.
Since 2023, Nvidia's revenue has soared on the back of AI demand.
NVDA Revenue (TTM) data by YCharts
This year, its revenue is expected to reach $204 billion, clearly indicating that AI investments aren't waning. Nvidia's graphics processing units (GPUs) are the backbone of AI, as they train AI models and then handle inference when deployed. With many of the big tech companies announcing record capital expenditures in 2025, Nvidia will be a primary beneficiary of this spending.
Another beneficiary is Broadcom, which makes connectivity switches for data centers and custom AI accelerators (which Broadcom refers to as XPUs). Broadcom's management sees a massive and growing demand for XPUs, as they can often outperform GPUs when the workload is set up properly.
Broadcom currently has three companies using its custom-designed XPUs. The company believes this hardware will have a market opportunity of between $60 billion and $90 billion in revenue by 2027. However, Broadcom also has four other customers just launching their XPUs, and they are not included in this figure. With Broadcom's trailing-12-month revenue sitting at $55 billion, it has a massive growth runway.
NASDAQ: AVGO
Key Data Points
I'm confident these two will continue to do just fine over the next few years, as big tech companies can't afford to slow their AI spending. Otherwise, they risk falling behind competitors who are willing to continue their AI spending. As a result, I'm using this dip to load up on shares of these two.
AI hyperscalers: Amazon, Alphabet, and Meta Platforms
Next, I'm evaluating at the AI hyperscalers, which are tech giants building AI infrastructure. The companies I'm looking at in this space are Amazon (AMZN 0.91%), Alphabet (GOOG 1.18%) (GOOGL 1.26%), and Meta Platforms (META 2.61%), which are all customers of Nvidia and Broadcom and have all announced massive AI infrastructure spending.
These aren't some fly-by-night companies that are spending money they don't have; instead, they have a solid base business to fund their AI investments.
For Amazon, it's the company's commerce and cloud computing segments. Although Amazon's commerce sales could come under pressure if a trade war drives prices higher, its cloud computing division, Amazon Web Services (AWS), should do just fine.
Cloud computing is a major growth segment for Amazon and is a huge beneficiary of workload migration to the cloud and AI spending. With 58% of Amazon's operating profits coming from cloud computing over the past 12 months, it has contributed far more to Amazon's profits than the commerce business.
NASDAQ: AMZN
Key Data Points
Alphabet and Meta Platforms each have advertising-focused businesses that fund their AI investments. These two generate a ton of cash from their various properties (Alphabet has Google and YouTube, while Meta has Facebook, Instagram, WhatsApp, Threads, and Messenger) and are using it to build out AI infrastructure.
Alphabet and Meta have popular generative AI models but are still working to capture market share in this space. While their AI investments will continue (which is great over the long term), their short-term ad revenue may struggle. However, this spending always recovers, and by buying each stock now and taking the long-term view, you'll have a great entry price.
While each of these stocks has been expensive at some point, the recent sell-off has made each stock rather affordable.
NVDA PE Ratio (Forward) data by YCharts
From a forward price-to-earnings (P/E) perspective, many of these stocks look very attractive and are the cheapest they have been for some time. I think investors should use the latest market sell-off to their advantage and load up on these companies that will be long-term winners.
