3 Technology Stocks To Consider Buying On The Dip

The benchmark S&P 500 Information Technology Index is down 1.50% for the past week, as AI stocks were stuck in a blender that affected big names like Palantir PLTR, Nvidia NVDA, and Amazon AMZN.

The damage could have been worse if not for a Friday speech by Federal Reserve Chair Jerome Powell, in which he indicated that a Fed rate cut may be justified due to a gloomy jobs picture. That fueled an 800-point rise in the Dow Jones Index, leading into Friday’s trading. 

It’s got a lot of investors wondering what the tech drop is all about, and whether it’ll stick.

So today, let’s examine the reasons why this dip doesn’t look like it will last.

“AI stocks are jittery right now because expectations ran ahead of what companies could realistically deliver,” said Siamak Freydoonnejad, co-founder of Sprites AI, a San Francisco-based AI SaaS platform. “What’s happening now is investors are recalibrating, separating hype from value, which I view the current give-back as a healthy moment.”

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It may take a while for that kind of shakeout to be reflected in the numbers, so investors are seeing pullbacks in the meantime. “Yet inside enterprises, AI adoption is still accelerating,” Freydoonnejad said. “If anything, it’s expanding. Boards across every sector continue to fast-track AI, and none of those shifts are reversible.”

Underperformance may also be a contributing issue, and a big one, considering that U.S. companies spent $109 billion on AI from 2013 to 2024.

“The ongoing, but mild, AI-stock correction is an opportunity, giving Main Street investors a chance to get in at a discount during a short-term dip,” said John Murillo, a trading professional with 25 years of experience in capital markets and chief business officer at B2BROKER, a global fintech solutions provider.

Murillo pointed to a recent MIT study showing that 95% of generative AI pilots are not delivering measurable results. “That’s a big deal because it gives more metrics towards the already intuitive perception that the market might be overvaluing these stocks,” he said. “The study points to a ‘learning gap’ where companies aren’t integrating AI properly, which could mean the sector is facing some fundamental issues.”

Tech investors may be equally vexed by OpenAI’s CEO, Sam Altman, who recently warned about an AI bubble. 

“He compared the ongoing AI frenzy to the dotcom bubble of 2000, which was perceived as a red flag for investors,” Murillo said. “Also, Chinese AI firms like DeepSeek are closing the gap, and U.S. policymakers are scrutinizing AI’s societal impact, especially on job displacement.”

Three Stocks To Buy At A Decent Bargain Right Now

Market experts say that while it’s difficult to predict if this is the actual bottom, AI stock deals can be had right now. 

“As a general rule, I have never tried to time the market,” said Asha Jadeja, a Silicon Valley-based venture capitalist and investor (and an early Google investor). “As far as technology stocks, especially the Magnificent Seven stocks, if AI is going to be as transformational as we think, I believe these stocks might be undervalued right now.”

If you’re in the market for an AI stock deal, these names belong at the top of your checklist.

Palo Alto Networks

Year-to-date performance: 2.38%

Palo Alto Networks PANW, a network security solutions provider, is quietly gaining support on Wall Street.

“I love AI, but cybersecurity is bigger than AI, and if you talk to chief technology officers, they’ll tell you they’re only spending on two places,” said Stephanie Link, chief investment strategist and portfolio manager at Hightower Investors. “They’re spending on AI because they still don’t understand what it means for their business, and they’re spending on cybersecurity because they cannot afford to lose their business to a cyber threat.”

Link also believes Palo Alto’s purchase of Israel-based software security provider CyberArk is “absolutely the biggest theme” in cybersecurity right now. “Plus, earnings per share for Palo Alto are up 25% year-over-year, and product revenue (up) 19% and subscription revenue (up 15%) look good,” she said. “You’re going to continue to see massive consolidation in cybersecurity.”

Nvidia

Year-to-date performance: 32.6%

What tech investor wouldn’t love a clear AI infrastructure leader with 69% year-to-year revenue growth? That’s what Nvidia brings to the table.

Nvidia is worth a buy if it dips below $174.50, which is 10% below recent highs, Murillo pointed out. “Then it would be wise to apply a wait-and-see approach in the next one or two weeks, while monitoring Powell’s Fed rate clues and corresponding market reaction,” he said. “It would make sense also to track MIT’s follow-up reports on AI adoption.”

It should also be a robust cornerstone of a long-term AI portfolio. “In a dip, the names I’d watch are the ones embedding AI deeply into workflow,” Freydoonnejad said. “Nvidia belongs because hardware demand is locked in for every serious model build.”

On the due diligence side, NVDA investors “should keep an eye on China export restrictions, custom chip competition from hyperscalers”, said Giuseppe Sette, co-founder and president of UK-based AI-toolbox provider Reflexivity.

Advanced Micro Devices

Year-to-date performance: 38.9%

Santa Clara, California-based semiconductor mainstay Advanced Micro Devices AMD is in high form right now, with expected earnings of $1.17 per share for the current quarter, representing a year-over-year increase of 27.2%. 

The stock is down 5.49% over the past week, but don’t expect that slide to last long.

Sette calls AMD an Nvidia alternative right now, even though the company is a distant second in the global GPU market. “AMD’s MI300X GPU ramp and data center AI revenue growth are positives,” he noted. “Additionally, AMD is more attractive than Nvidia on valuation metrics.”

The primary long-term concern with AMD is “execution challenges competing with Nvidia’s ecosystem,” Sette added.

Editorial content from our expert contributors is intended to be information for the general public and not individualized investment advice. Editors/contributors are presenting their individual opinions and strategies, which are neither expressly nor impliedly approved or endorsed by Benzinga.

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