5 Top AI Stocks I'm Buying on the Dip

Artificial intelligence (AI) stocks took a rare tumble last week, hit by a perfect storm of market pressures. Alarming inflation data, mounting geopolitical tensions, and growing concerns about valuation levels all contributed to the sell-off.

The Consumer Price Index (CPI), which tracks the average price changes of common goods and services that Americans buy, showed prices rising 0.5% from December, the fastest monthly increase since August 2023, pushing the annual inflation rate to 3%. This unexpected jump in inflation rattled markets across the board last week. Add in escalating global tensions and questions about whether AI stocks have run too far, too fast, and you have a recipe for market jitters.

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While these multiple headwinds can feel overwhelming, especially when they send high-quality AI stocks into a tailspin, these pullbacks often create prime buying opportunities for long-term investors. Here are five AI stocks I'm planning to buy in the wake of this latest dip.

1. The AI infrastructure giant

Nvidia (NASDAQ: NVDA), the dominant force in AI computing infrastructure, fell 3.1% last week. The stock's forward price-to-earnings ratio of 31.4x represents a modest premium to the benchmark S&P 500 (SNPINDEX: ^GSPC), which trades at 24 times forward earnings.

Nvidia's graphics processing units (GPUs) power most of today's AI applications, and its software ecosystem creates powerful network effects that competitors struggle to match. With growing investments in AI software applications, advanced robotics, and data center solutions, Nvidia has expanded well beyond its GPU roots.

This dip offers a chance to buy into the one company that is arguably in the best position to capture value across multiple layers of the AI technology stack.

2. The data analytics pioneer

Palantir Technologies (NASDAQ: PLTR), riding the accelerating AI platform adoption trend, fell 15% last week. Despite its incredible forward price-to-earnings (P/E) ratio of 178x, the company's Q4 2024 results showcase the blistering growth behind this staggering premium.

Palantir's data analytics platforms have become essential tools for defense and intelligence operations, with commercial applications expanding rapidly. Speaking to this point, the company closed 129 deals worth at least $1 million in Q4 alone while generating $517 million in adjusted free cash flow, demonstrating both strong growth and improving profitability.

With its proven technology now scaling rapidly across the commercial sector and margins expanding, this pullback offers a chance to buy into Palantir's accelerating AI-driven transformation at a more attractive price.

3. The optical computing dark horse

Poet Technologies (NASDAQ: POET), which is developing next-generation AI infrastructure solutions, fell 10.6% last week. While the company's shares trade at a mind-bending 1,920x trailing sales, its optical interposer technology could fundamentally reshape data center interconnects, a fact that may justify this sizable premium.

Poet's photonic integrated circuits address a critical bottleneck in AI computing: data center efficiency. The latest test results show significant performance gains, and major cloud providers are actively evaluating the technology. Thus, Poet seems to be at an inflection point.

As a result, last week's double-digit drop may prove to be an attractive entry point into a company that could become essential to the next generation of AI infrastructure.

4. The voice interface innovator

SoundHound AI (NASDAQ: SOUN), a leader in voice AI technology, fell 6.3% last week. Although its trailing price-to-sales ratio of 46.8x is high for a small-cap tech stock, this premium valuation reflects the company's rapid revenue growth and expanding market presence.

SoundHound's conversational intelligence platform outperforms traditional solutions in both accuracy and flexibility. This superior performance has helped the company secure strategic partnerships with leading automotive manufacturers and popular fast-food chains. As a result, its advanced voice AI technology is well-positioned to become an essential tool for major brands in the coming years.

Last week's pullback presents an opportunity to invest in a pure-play voice AI company, as this technology is becoming increasingly critical to human-machine interaction.

5. The autonomous delivery play

Serve Robotics (NASDAQ: SERV), a pioneer in autonomous last-mile delivery, dropped 13.2% last week. Its shares are currently trading at 306 times trailing sales -- a significant premium compared to the S&P 500 and most tech stocks.

The company has rapidly expanded its autonomous delivery fleet, completing tens of thousands of deliveries in partnership with Uber and 7-Eleven. Additionally, a major expansion is underway, with an agreement to deploy up to 2,000 robots for the Uber Eats platform this year.

With rising labor costs and growing demand for delivery services, major retailers and restaurant chains are accelerating their automation strategies. This recent dip thus presents a timely opportunity to invest in a leader in autonomous delivery before widespread commercial rollouts drive substantial revenue growth.

A buying opportunity

Each company represents a different approach to profiting from the AI revolution, from established leaders to emerging innovators. While their valuations vary widely, all five stocks offer compelling opportunities for long-term investors willing to weather short-term volatility.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $348,579!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $46,554!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $540,990!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Learn more »

*Stock Advisor returns as of February 21, 2025

George Budwell has positions in Nvidia, Palantir Technologies, Serve Robotics, and SoundHound AI. The Motley Fool has positions in and recommends Nvidia, Palantir Technologies, Serve Robotics, and Uber Technologies. The Motley Fool has a disclosure policy.