Three AI-linked shares I'm investing in during the price decline
In a panic-induced frenzy, Wall Street took a nosedive on Monday as the news of Chinese AI company DeepSeek's chatbot capabilities, seemingly on par with OpenAI's, send waves of fear across the tech sector. This led to an alarming 17% plunge in Nvidia shares, erasing a whopping $600 billion in market value, making it the largest single-day loss ever for a public company.
The contagion swiftly spread, causing the broader market to shed a staggering $1 trillion in value as investors wrestled with the fear that AI progress might require fewer premium chips than previously anticipated. However, this market tremor reveals a significant misunderstanding of the AI industry's complex technological and capital requirements.
Despite the frantic selling, this presents a thrilling opportunity for long-term investors. In fact, I'm planning to double down on three leading AI stocks primarily unaffected by DeepSeek's announcement.
Leveraging Voice AI at the right price
DeepSeek's announcement shook up SoundHound AI's (SOUN -9.95%) shares, causing them to tumble 11.2%. But amidst the chaos, I see an opportunity to invest in this voice AI pioneer, which I believe has a clear growth path.
What sets SoundHound apart is its position as an independent player in a market with high barriers to entry. With over 155 granted patents, the company's proprietary technology allows businesses to create custom voice interfaces without relying on big tech platforms like Alexa or Siri.
SoundHound's revenue is projected to nearly double in 2025. While the current pullback may result in temporary dips, I see it as the perfect moment to invest in a focused AI player that's steadily marching towards growth.
Building the future's foundation
The DeepSeek-initiated market frenzy crushed Applied Digital's (APLD -6.41%) stock by 27.7%. But this classic case of Wall Street throwing out the baby with the bathwater overlooks Applied Digital's strategic role – one of powering the AI revolution through next-generation data centers.
Morgan Stanley predicts a massive 36GW power shortfall for U.S. data centers by 2028. With $5 billion in fresh funding from Macquarie Asset Management and strategic partnerships with Nvidia, APLD is primed to benefit regardless of which AI models triumph. This sell-off is an attractive gift for patient investors.
The indispensable chip manufacturer
Taiwan Semiconductor Manufacturing Company (TSM 0.38%) shares took a hit, shedding 13.3% on Monday. But Wall Street's shortsighted focus on AI chip demand ignores TSMC's pivotal role. As the world's leading semiconductor foundry, TSMC produces chips for a diverse range of market leaders, including Apple and AMD.
TSMC's formidable 65% market share in global foundry revenue, coupled with its advanced manufacturing expertise, secures its irreplaceable position in the global tech industry. This pullback presents a rare opportunity to invest in the backbone of modern technology at an attractive valuation.
Monday's AI-driven sell-off has generated attractive entry points across the tech sector. While others panic, I'm eyeing companies that bring unique value to the AI ecosystem – SoundHound's specialized voice AI technology, Applied Digital's crucial digital infrastructure, and TSMC's unparalleled manufacturing capabilities. These are different approaches set for the AI revolution, and I believe they offer compelling long-term investment opportunities, allowing us to leverage the market's temporary hysteria to our advantage.
After observing the market tremors caused by AI advancements, I'm considering investing more in companies that seem unfazed by the current panic. For instance, I'm drawn to Advanced Micro Devices (AMD), a company whose shares have remained relatively stable during this period. Investing in AMD would mean putting money into a company that produces chips crucial for AI applications.
Furthermore, the turmoil has also provided an opportunity to invest in the finance sector, particularly in companies that offer robust AI solutions.passthrough finance is one such company that has shown resilience amidst the market hysteria. Its innovative use of AI in delivering financial services could potentially offer attractive returns for long-term investors.
