For the last two years, both the S&P 500 and Nasdaq Composite posted gains well in excess of 20%. This scorching hot momentum initially carried into 2025 too, but more recently, the markets have started to take a breather.

First it was DeepSeek, a Chinese artificial intelligence (AI) start-up that brought shockwaves after it claimed to have built highly sophisticated models using older architecture compared to what big tech companies in the U.S. have deployed.

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Following on the heels of the DeepSeek drama came a series of tariffs instituted by the new Trump administration. Given the implications tariffs can have on trade negotiations and geopolitics, investors have been wary of how these new policies will impact economic growth.

As stocks continue sliding off a cliff, it can be difficult to discern which dips may be buying opportunities hiding in plain sight. According to Dan Ives, who leads technology research at Wedbush Securities, two AI behemoths in particular are trading in the “sweet spot” right now.

Let’s explore what companies Ives recently called out as compelling opportunities and assess why scooping up shares right now could prove to be a savvy decision for long-term investors.

1. Palantir Technologies

The first company on Ives’ list is Palantir Technologies (NASDAQ: PLTR), a developer of enterprise software solutions sold to both the private and public sectors. Since the company released its Artificial Intelligence Platform (AIP) suite in 2023, Palantir has witnessed an acceleration across both its top line and profitability profile.

PLTR Revenue (Quarterly) data by YCharts

The successful launch of AIP has helped Palantir land on the radar of more institutional investors, and as such, the company has earned more coverage among Wall Street research analysts. While this is all good news for Palantir’s business, investors have had little in the way of optimal buying opportunities.

The reason I say this is because Palantir stock gained 340% last year — making it the top performer in the S&P 500. And while shares had gained as much as 65% this year, the stock has recently dropped by a considerable margin.

A combination of insider selling as well as changes to the Pentagon’s budget are the primary culprits driving Palantir’s sell-off right now. Despite these factors, Ives sees Palantir’s current valuation levels as a benefit — and I agree. Shares are now down more than 30% from all-time highs, yet nothing concrete has actually changed in the company’s long-term growth prospects.

While Palantir has emerged as an expensive name to own among AI growth stocks, dips of this magnitude are few and far between. The company is doing a nice job laying the groundwork for becoming an integral part of the AI software ecosystem, and in my eyes it’s now a good time to scoop up shares as the company’s valuation normalizes a bit.

Image source: Getty Images.

2. Nvidia

It probably shouldn’t come as a surprise that Ives called out chip leader Nvidia (NASDAQ: NVDA) as a good name to own right now. For the last few years, it’s been almost impossible to lose money owning Nvidia stock. Companies all around the world have been pounding the door to buy as much of the company’s graphics processing units (GPUs) as they can.

In fact, many of the company’s “Magnificent Seven” cohorts, including Meta Platforms, Microsoft, Alphabet, Tesla, and Amazon, frequently shout out to Nvidia during their earnings calls — signaling to investors just how integral the company’s hardware and software is to the broader generative AI movement.

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As we evaluate the midway mark of 2024, the sage analysts at Bank of America (BofA) present a curated selection of top-tier companies - the cream of the crop, if you will - for discerning investors to mull over heading into the third quarter. These prized entities flaunt robust fundamentals within their respective sectors and flaunt a sumptuous earnings track record, coupled with promising growth forecasts.

#1: Advanced Micro Devices - A Silicon Valley Gem

Nestled in the heart of California, Advanced Micro Devices (AMD) stands tall as a colossus in the semiconductor realm, crafting state-of-the-art computer processors and graphic cards catering to diverse markets. Famed for their AI-centric chips underpinning gaming, PCs, and data solutions, AMD transcends hardware augmentation by fostering synergies with software maestros, researchers, and industry behemoths. While often considered a runner-up to Nvidia in the AI chip dominion, AMD's more budget-friendly alternative packs quite a wallop, reflected in its robust $259 billion market valuation.

Following a tempestuous 2022, witnessing AMD's stock nosedive by a staggering 60%, the firm staged a heroic resurgence in 2023, soaring by over 100% on the wings of stellar earnings. The upward trajectory persists into this year, with a commendable 10% uptick in share value. Trading at 48 times forward earnings, a bargain compared to its peer Nvidia (NVDA), AMD remains poised for exponential growth, embodying substantial potential for investors to reap capital appreciation.

www.barchart.com

In the realm of sales growth, AMD's ascent is nothing short of meteoric, catapulting from $6.7 billion in 2019 to a staggering $22.6 billion last year, driven by the insatiable hunger for AI chips. The initial quarter of this year showcased revenue scaling to $5.4 billion, marking a 2.2% year-over-year uptick, aligning with a net income surge to $123 million, effecting a complete about-face from the previous year's loss. These robust financials bear testament to AMD's indomitable growth narrative.

Riding high on a legacy of avant-garde AI-imbued chips, AMD's forthcoming MI350 series, anticipated to debut in 2025, threatens to revolutionize the AI inference landscape with a projected 35-fold surge in performance. Meanwhile, the MI400 series, slated for 2026, is primed to deploy a cutting-edge "Next" CDNA architecture challenging Nvidia's R-Series platforms.

The recent rollout of the AMD Radeon RX 7600 XT graphics card heralds a new dawn for AI workload memory specifications, complemented by the impending release of the game-changing next-generation Ryzen CPU hinged on AMD's 8000 Zen 5 architecture. These strategic maneuvers underpin AMD's meteoric trajectory in the semiconductor domain.

#2: Shopify - The E-Commerce Maestro

Hailing from Ottawa, Shopify (SHOP) emerges as a preeminent e-commerce juggernaut renowned for its innovative, user-centric platform, facilitating a seamless route for users to erect, tailor, and expand their virtual storefronts. Owing to its avant-garde tools and services spanning logistics, payments, and marketing, Shopify prides itself on its customer-centric ethos propelling it towards sustained growth as the e-commerce landscape evolves.

Valued at a princely $85.5 billion by market cap, Shopify's shares witnessed a modest 2.2% uptick over the past year. Mirroring a phoenix-like revival last month, the company marked a 17% resurgence from its late-May troughs, leveraging substantial revenue and Gross Merchandise Volume (GMV) growth in the process.

www.barchart.com

In the first quarter of 2024, Shopify unveiled a stellar earnings report, eclipsing analysts' prognostications on all fronts. Boasting a revenue surge to $1.86 billion, a notable 23% climb from the previous year's tally, the platform's Gross Merchandise Volume (GMV) - a pivotal metric - beheld a concurrent 23% swell to reach $60.9 billion.

Despite incurring a net loss of 21 cents per share, a deviation from its 5 cents per share net income a year prior, Shopify managed to showcase adjusted earnings per share of 20 cents, outstripping analyst estimates by a commendable 18%.

Projections for Shopify remain sanguine, underpinned by the burgeoning adoption of e-commerce. The company anticipates a dizzying 144% EPS surge this year, maintaining a trajectory of vibrant growth.

Exploring the Growth Trajectories of Top Tech Stocks in Fiscal 2025

Nevertheless, when DeepSeek made its grand entrance into the AI realm in late January, Nvidia stock started to slide. The driving force behind the sell-off was that DeepSeek claimed to have used older, less capable GPUs from Nvidia to build its models — causing some investors to worry if the company’s newer models, Hopper and Blackwell, were worth the price tag.

Over the last few weeks, companies have been reporting earnings results for the fourth quarter and full year of calendar 2024. If the big tech companies I referenced above told us anything, it’s that investment in AI infrastructure isn’t going away. The reported $325 billion of AI capital expenditures allotted for 2025 alone should serve as a bellwether for Nvidia as the company scales its new Blackwell chipware and begins focusing on an even newer architecture called Rubin.

NVDA PE Ratio (Forward) data by YCharts

Despite Nvidia’s continuation of impressive data center growth, underscored by its market-leading GPU empire, shares are trading at levels incongruent with a high-octane growth stock.

Right now, Nvidia’s forward price-to-earnings (P/E) multiple of 26.7 is its lowest level in about a year. To me, this is an incredibly rare opportunity to scoop up shares of Nvidia as it trades at a meaningful discount to historical levels — especially when you layer on the company’s current growth rates and its trajectory given strong secular tailwinds.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, Palantir Technologies, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, Palantir Technologies, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.