Stocks have made a major pullback after two consecutive years of incredible returns. Market corrections can be an investor's best friend, though. With the Nasdaq Composite and the S&P 500 in correction territory, now's the time to put some of your cash pile to work.
One of the big winners as the stock market soared has been Nvidia (NVDA +1.63%). The artificial intelligence (AI) leader returned 171% last year after a more than 230% gain in 2023. Investor concerns led shares to drop by almost 20% off its January high, though.
Nebius Group (NBIS +14.96%) is another technology company that's been impacted by the market sell-off. The provider of cloud services and supporting AI application tools and platforms is more than 40% off its 2024 peak share price.
There are overlapping reasons why both should now be considered by investors looking to take advantage of this market correction.
Don't be frozen by fear
It shouldn't be unexpected to see the stock market taking a breather after a sharp run higher over the past two years. Technology names led this market sell-off. The catalysts that drove these stocks lower include real or perceived high valuations and sector-specific concerns that capital spending on AI infrastructure would materially slow.
One thing for certain is that Nvidia's decline erased the argument that its shares are too richly valued. While buying into sharp declines is never easy, it's exactly the time to put money to work that has been on the sidelines. Doing so can springboard future returns. And there's more than one good reason to add Nvidia to a portfolio now.
NASDAQ: NVDA
Key Data Points
Nvidia's attractive valuation
Nvidia's drop so far in 2025 has the stock more than 20% off January highs. But that might not last as investors catch on to its relatively low valuation. A price-to-earnings (P/E) ratio based on this year's estimated earnings is hovering around 25. That's right in line with the tech-heavy Nasdaq Composite. Yet Nvidia isn't just an average technology company.
The company's own guidance suggests first-quarter revenue will grow 65% year over year. That's because technology companies continue to invest in AI infrastructure. Dave Salvator, Nvidia's director of accelerated computing products, explains what is driving growth this way:
AI reasoning models and agents are set to transform industries, but delivering their full potential at scale requires massive compute and optimized software. The “reasoning” process involves multiple models, generating many additional tokens, and demands infrastructure with a combination of high-speed communication, memory and compute to ensure real-time, high-quality results.
He went on to note that Nvidia's new Blackwell GPUs (graphics processing units) and CPUs (central processing units) fulfill those needs to support the next generation of AI models and agents. Nvidia also has its next-generation Rubin platform in the works for a 2026 launch.
Quickly growing GPU clusters
Nebius is another company deploying massive amounts of GPUs. The company is expanding its network of full-stack infrastructure for AI. Its large-scale GPU clusters and cloud platforms are being increasingly used by developers. The Netherlands-based company has a global footprint and is growing quickly in the U.S.
It recently announced plans for a new data center in New Jersey with up to 300 megawatts of design capacity. It is also adding incremental capacity to a Kansas City location deploying a second phase of capacity in the coming months.
Nvidia has taken notice of Nebius' growth, too. It participated in a $700 million private funding round for Nebius late last year. Nvidia also owns more than 1 million shares of Nebius stock.
The buy case for Nebius
Buying Nebius Group stock here takes somewhat of a leap of faith. But its recent pullback also potentially put its valuation in attractive territory. The Nasdaq correction has pushed Nebius shares lower by 35% in the last month.
While it is still reporting a net loss, Nebius is growing revenue quickly. This could be the pivotal year that brings Nebius closer to profitability, though. The company reported revenue of $117.5 million in 2024. But management said last month it is "well within reach" to achieve an annualized revenue run rate of between $750 million and $1 billion by Q4.
NASDAQ: NBIS
Key Data Points
The latest news of additional data center capacity and Nvidia's Blackwell GPUs coming online later this year helps to support that projection. That would imply revenue of at least $187.5 million in Q4 alone. With an abundance of cash on the balance sheet, and using enterprise value, the company would be valued at under six times 2026 sales. That's not overly expensive, and Nebius should continue its capacity expansion.
Investors who have been waiting for an opportunity to deploy investable cash now have a good opportunity. Adding either or both of these growing AI stocks is now much more attractive given the 2025 market swoon.
