Earnings season is here once again, offering us a look into our favorite companies' latest performance and view of the future. Investors may feel particularly eager to hear the thoughts of chief executive officers, considering the challenge facing U.S. companies today: President Trump's import tariff plan. Trump's tariff announcement earlier this month dragged indexes lower as investors worried about higher prices on imports eating into corporate profits.
This is particularly a concern in the tech industry as most players import materials and even finished goods from other countries. Though Trump placed an exemption on electronics, this may be temporary. So, as companies report earnings, investors will pay close attention to how they may handle potential tariffs to come.
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Does this mean you should hold off on buying tech stocks? Not at all. Tech companies may face difficulties in the near term, but well-established players still are likely to excel over the long run. And those well positioned in the high-growth artificial intelligence (AI) market make a great addition to any tech portfolio -- especially at today's bargain prices. Let's check out three no-brainer AI stocks to buy before earnings season gets rolling.
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Nvidia (NASDAQ: NVDA) faces its share of challenges right now -- from a recent halt on chip exports to China to the possibility of import tariffs in the near future. The company makes most of its top-selling AI chips in Taiwan, through Taiwan Semiconductor Manufacturing. But it's important to remember the bright side of this picture.
The company has become the global leader in AI, offering the highest-performance chip around as well as a complete range of supporting products and services. This means customers can turn to Nvidia for pretty much all of their AI needs -- and work with the most advanced technology on the market. AI has the potential to revolutionize businesses, helping them to become more and more efficient, and it's unlikely customers will give up on this. In fact, any economic slowdown might even push them to accelerate their AI plans to streamline their operations and lower costs.
All of this, Nvidia's long track record of explosive earnings growth, and the company's valuation -- today trading at only 22 times forward earnings estimates -- make it a fantastic buy right now.
Amazon (NASDAQ: AMZN) is another player that's likely to score a big AI win. The company already uses AI to gain in efficiency across its fulfillment network, and this may be particularly important in any potential economic slowdown. And Amazon also is a seller of AI through its cloud computing business, Amazon Web Services (AWS).
AWS, as the world's No. 1 cloud provider, already has a huge customer base thanks to this leadership position -- and as these customers aim to build AI guess where they're likely to turn? To AWS. That's been happening because just last year AWS posted a $115 billion annual revenue run rate and has credited AI for its growth. The cloud business offers everything from chips to a fully managed platform allowing users to tailor large language models (LLMs) to their needs.
And, like Nvidia, Amazon has delivered earnings growth over time, making it a solid, well-established operation. That's why it's definitely a buy today while trading at 27 times forward earnings estimates.
You probably think of Meta Platforms (NASDAQ: META) as a social media company, since it's the owner of the most popular such apps -- from Facebook and Messenger to WhatsApp and Instagram. And you're right. This is Meta's main, revenue-driving business, as the company generates most of its revenue through advertisements across these apps.
But AI is starting to become a bigger and bigger part of the picture. For example, Meta created Meta AI, available on its apps, and it's already become the world's most-used AI assistant. The idea is, thanks to Meta AI, you'll spend more time on the apps, and as a result, advertisers will spend more money to reach you there.
Meta isn't stopping at just that, though, and aims to become a leader in the broader AI market. It's on the right track, with its development of the Llama LLM and heavy investment in AI. The company says it may invest as much as $65 billion in the technology this year alone.
Meta has increased earnings over time, is a clear leader in social media, and has big AI ambitions -- on top of that, the stock looks dirt cheap trading at 20 times forward earnings estimates. All of this makes it a no-brainer stock to buy as earnings season heats up -- and one to hold onto well into the future.
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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. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.