Nasdaq Correction: 3 Artificial Intelligence (AI) Stocks That Could Make You a Millionaire
As the Nasdaq index has dropped by at least 10% from its peak, many investors are feeling uneasy about this correction. Nonetheless, such pullbacks are fairly routine, typically occurring about once every year on average. This is essentially the cost of participating in the stock market, and investors should try to remain calm even if their portfolios have declined more than 10% from their highs.
The latest drop has erased the gains accumulated since September of last year, effectively rolling back the clock by around six months. However, this situation also presents excellent buying opportunities that might significantly speed your progress toward achieving millionaire status.
Why focus on these three stocks specifically? They are deeply immersed in one of the most substantial technological disruptions taking place today: artificial intelligence (AI).
Even a slight performance advantage—a few extra percentage points—can have an impressive impact on your returns.
The three AI-focused stocks that stand out are Nvidia (NVDA -3.31%), Taiwan Semiconductor Manufacturing Company (TSM -1.39%), and Alphabet (GOOG -2.32%) (GOOGL -2.21%). Since these companies are already sizable, a modest investment alone is less likely to make you a millionaire right away. Nonetheless, they each have the potential to deliver returns that outpace the broader market, accelerating your journey to wealth.
Consider a scenario where you invest $500 each month in an S&P 500 index fund that has historically delivered about a 10% annual return. You’d reach the million-dollar milestone in roughly 29 years. But if you manage to lift your annual returns to around 13%, you could cut that timeline short by about five years.
That’s why identifying and investing in companies that can outperform the general market is so important. By doing so, you can drastically reduce how long it takes to become a millionaire.
All three of these companies have what it takes to beat the market, backed by formidable growth trends that favor them.
This trio benefits from a powerful wave of demand.
Nvidia produces graphics processing units (GPUs) used to train AI models and power inference once those models are active. Its GPUs currently control much of the AI market, and the company has enjoyed tremendous growth so far. According to Wall Street analysts, its revenue is projected to jump 56% by its 2026 fiscal year (ending January 2026).
This continued expansion is tied to the fact that AI development is in the early stages, with many of Nvidia’s major customers announcing record capital expenditures for the year—large portions of which will end up going to Nvidia. Given this dynamic, investors should not overlook Nvidia as a long-term gem.
Another major beneficiary of AI’s momentum is Taiwan Semiconductor Manufacturing Company (TSMC), which builds many of the chips powering AI workloads. Nvidia is a key client, but TSMC also supplies a range of other AI-minded companies. TSMC’s leadership anticipates that revenue from AI will grow at a compounded annual rate of about 45% over the next five years, driving the company’s overall revenue up by nearly 20%. Thanks to TSMC’s neutral role in the semiconductor space, it has a comprehensive understanding of future demand, and when it predicts chip demand will more than double within five years, investors should pay close attention.
Although Alphabet primarily makes its money through advertising platforms like Google Search and YouTube, it remains a major competitor in the AI realm. The company integrates AI into its ad products and even offers AI-based summaries within search results. However, its biggest AI boost may come from Google Cloud, its cloud computing arm, which benefits enormously from businesses needing on-demand computing power for AI workloads. In the fourth quarter, Google Cloud’s revenue surged 30%, making it one of Alphabet’s fastest-expanding segments. As a result, Alphabet delivers a balanced investment opportunity: the upside of AI and cloud growth, reinforced by the stability of premier ad platforms.
Following the market sell-off, each of these stocks is trading at a lower price compared to last September. Alphabet and TSMC both sit below 19 times forward earnings, which is cheaper than the averages for the Nasdaq and the S&P 500. Nvidia’s valuation is only marginally higher than those benchmarks, but its fast-paced growth justifies that slight premium.
Nvidia’s valuation is just a bit above those two main indexes, but this higher multiple remains sensible given the company’s standout expansion.
All three stocks look like strong buys right now, and their recent price declines further increase the odds that they’ll outperform the market in the years ahead.
Source: https://www.fool.com/investing/2025/03/18/nasdaq-correction-3-artificial-intelligence-ai-sto/