Investors have been very fortunate over the past couple of years. A tremendous run for technology stocks on artificial intelligence enthusiasm, investments, and rising long-term expectations has carried the broader stock market to impressive heights.
But it seems the market has begun to cool off over the past week or so, with some of the top-performing technology stocks dipping off their highs. As fun as soaring stock prices are, it's crucial to remember that volatility is a regular part of long-term investing, and that it's healthy when things take a bit of a breather after an extended run.
It can also be a good opportunity to buy your favorite stocks at lower prices. Three Fools got together to identify three winning tech stocks that still offer that right mix of long-term growth and present-day value. When it was all said and done, Nvidia (NVDA +5.93%), SoundHound AI (SOUN +2.57%), and Netflix (NFLX +0.34%) stood out from the crowd.
Here is what you need to know about each stock right now.
Image source: Getty Images.
This AI accelerator leader is not done rising
Will Healy (Nvidia): It seems nothing can hold back Nvidia's stock price growth for long. The chip stock is up around 1,400% from its 2022 low as its research spearheaded the rapidly growing AI accelerator industry.
That product has so fundamentally changed the company that its data center segment made up 89% of the company's revenue in the first quarter of fiscal 2026. This is a dramatic turnabout from three years ago, when the data center segment was not significantly larger than Nvidia's long-established gaming business.
Also, Nvidia's profits have risen so dramatically that even with its massive gains, its P/E ratio is only about 56. In comparison, Advanced Micro Devices (AMD), whose stock has experienced much lower returns, trades at 94 times earnings.
Moreover, there are no meaningful signs of a slowdown. Grand View Research forecasts a compound annual growth rate (CAGR) of 29% for the AI chip market through 2030, and Nvidia has far exceeded that estimate.
In the first quarter of fiscal 2026, its revenue of $44 billion rose 69% from year-ago levels. Even though a company with a $4.2 trillion market cap is unlikely to sustain that growth rate, the aforementioned CAGR makes it likely to continue reporting robust revenue growth.
Additionally, competitive threats have not held it back. DeepSeek's breakthrough on low-cost AI training earlier this year contributed to a temporary pullback of over 40% in the stock price, but Nvidia recovered quickly. Also, while AMD's upcoming MI400 release next year could bring competition to Nvidia's Vera Rubin platform, the company still has time to respond to that threat.
NASDAQ: NVDA
Key Data Points
Indeed, Nvidia's massive stock gains and huge market cap might deter some investors from buying. Nonetheless, with its domination of the AI accelerator market and the company's relatively low P/E ratio, Nvidia stock remains on track for further growth.
A recent pullback in SoundHound AI stock could present an opportunity for long-term investors
Jake Lerch (SoundHound AI): My choice is SoundHound AI. Here's why.
NASDAQ: SOUN
Key Data Points
First, let's put the recent downturn in context. It's no surprise that the artificial intelligence (AI) sector is getting hit hard by the recent volatility in the stock market. Many of the stocks in this sector are young companies that are developing cutting-edge technology. Therefore, when the growth trajectory of the industry is questioned, sell-offs can be steep and sudden. Yet, these big sell-offs present an opportunity for long-term investors.
Turning to SoundHound AI specifically, let's recall that the company is a leader within the voice AI sector. They have solid penetration within the automotive and restaurant sectors.
In addition, one of their primary competitive advantages is their ability to deploy custom voice AI solutions. What this means is that SoundHound works with companies to tailor their specific AI solutions, which are then deployed under the customer's brand name. This gives SoundHound a leg up on some of its big tech competitors by allowing clients to maintain brand management and data privacy.
Last, let's recall that only a few weeks ago, SoundHound posted a fantastic quarterly report. The company generated an all-time high of $43 million in revenue, which was up an eye-popping 217% from a year earlier. Management highlighted new or expanded business partnerships across the restaurant, automotive, healthcare, finance, and retail sectors. What's more, the company raised full-year guidance.
According to Yahoo Finance, sell-side analysts now expect SoundHound to generate $166 million in revenue in 2025 and $215 million in 2026, representing growth of 96% and 29%, respectively.
In short, SoundHound remains a promising long-term investment within the AI sector, thanks to its solid growth trajectory. Growth-oriented investors might therefore want to consider it on this most recent pullback.
Netflix isn't done delivering for shareholders
Justin Pope (Netflix): The streaming king has delivered in a big way for shareholders. Shares have risen over 70% over the past year, even after a recent 10% dip. While that's not a very big drop, it's still a dip long-term investors should consider buying.
One of the prettiest charts you'll see is that of Netflix's profit margins over time. As more people sign up for Netflix, the company becomes increasingly profitable because it can spread its content costs across more customers. Netflix stopped reporting subscriber numbers at the end of 2024, but paid subscriptions increased by 15.9% year over year in Q4 to 301.63 million, so new customer acquisition still had plenty of momentum at the end of last year.
NFLX Profit Margin data by YCharts
Additionally, Netflix is beginning to pull multiple growth levers. For instance, Netflix has raised its subscription prices over time and launched an ad-supported membership option a few years ago. It surpassed 70 million subscribers last November, and management expects ad revenue to double this year as some subscribers trade a little convenience for cost savings.
NASDAQ: NFLX
Key Data Points
Meanwhile, the future looks bright. Netflix has waded increasingly deeper into live sports, a significant media category that could continue to help drive and sustain subscriptions. Analysts estimate Netflix will grow earnings by an average of almost 23% annually over the next three to five years. I wouldn't say Netflix's stock is a once-in-a-lifetime deal at 46 times 2025 earnings estimates, but the stock seems fairly valued for a business with such a strong growth outlook and increasingly fatter profit margins.
Investors who buy and hold Netflix will likely be very happy with their decision a few years from now.
