Nasdaq Bear Market: 3 No-Brainer Artificial Intelligence (AI) Stocks to Buy in April

With the Nasdaq Composite in bear market territory (marked by the index falling more than 20% from its all-time high), there is some panic in the market. Investors are worried about the effect of tariffs on the consumer and would rather be in more conservative investments than artificial intelligence (AI) stocks, which have more upside but with more risk.

However, this selling is short-sighted. Anyone selling right now has a one-year time frame in mind, rather than the three- to five-year time frame that individual investors should have. If you stretch your investing horizon out longer, today's stock prices don't seem as scary; instead, they look like a buying opportunity.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

So, if you can invest in the market now, here are three stocks that I think have a very high chance of being worth a lot more over the next few years.

Investors are worried that consumer demand could affect the AI arms race

AI investing has mainly centered around the buildout of AI infrastructure, which has benefited companies like Taiwan Semiconductor Manufacturing (NYSE: TSM), Nvidia (NASDAQ: NVDA), and Broadcom (NASDAQ: AVGO). Each of these companies supplies important components in the AI value chain, and they have also sold off dramatically over the past few weeks.

Broadcom is faring the worst, down over 40% from its highs. Nvidia and TSMC are faring a bit better, with each off around 35%. However, I don't think that's warranted, as the AI arms race is bigger than the tariff fears.

When President Donald Trump announced tariffs on April 2, many were shocked at the high rates. One of the highest rates was levied on Taiwan, an astounding 32%. This could be a huge problem, as Taiwan Semiconductor makes a ton of chips for Nvidia and Broadcom (along with many other companies) that would instantly go up in price due to the tariff. However, semiconductors are exempt from this rate, so this isn't something investors should be worried about at the moment.

Still, with how high some of the other rates were, many are worried that it will severely affect the consumer and cause them to spend less money. Many of the AI hyperscalers (like Meta Platforms, Alphabet, and Amazon) derive most of their revenue from consumer-facing products through advertising or direct sales. If the consumer weakens, the base business of these three will also be harmed.

This could cause them to cut what would be record-setting capital expenditure budgets for this year, which were mainly slated to build data centers for AI demand. That's the working theory for why stocks like Taiwan Semi, Nvidia, and Broadcom are down, but I don't think it's valid.

The AI arms race is a long-term focus, not a short-term one

What investors forget about is just how massive these AI hyperscalers are. While these tariffs will likely harm their base business, the cash flows that these three generate, even with their business decreasing by 10% to 20%, is more than enough to fund their AI endeavors. The AI arms race is too important to win, and Amazon CEO Andy Jassy said this about AI demand and buildout during Amazon's fourth-quarter conference call:

We have to procure data center and hardware and chips and networking gear ahead of when we're able to monetize it. We don't procure it unless we see significant signals of demand. And so, when AWS is expanding its capex, particularly in what we think is one of these once-in-a-lifetime type of business opportunities like AI represents, I think it's actually quite a good sign, medium to long term, for the AWS business.

Jassy sees demand coming down the pipeline, and Amazon has to be ready for it. While it may look a little grim right now, over the next three to five years, demand for AI will be incredibly high, and these AI hyperscalers will need to build out the capacity today to fulfill it.

That bodes well for companies like Taiwan Semiconductor, Nvidia, and Broadcom, which are each vital in the AI supply chain. Although AI buildout may slightly decrease this year due to tariffs affecting companies, there will still be strong growth, and these three will benefit from it. After the sell-off, these stocks are all pretty cheap from a forward price-to-earnings (P/E) standpoint.

TSM PE Ratio (Forward) data by YCharts

One thing to keep in mind when using the forward P/E ratio is that it uses analyst projections to guide the future earnings part of the equation. Many analysts haven't updated their earnings projections with tariffs in mind. Most will likely wait until some first-quarter results are reported, as that will give them an idea of where demand could be heading.

Regardless, considering the long-term tailwinds in the data center market, I think these prices are attractive enough. Nvidia's CEO thinks that data center capital expenditures could hit $1 trillion by 2028, which would be a huge boost for this trio if that comes true. Huang has been right about the demand for AI for a long time, and the current weakness looks like a great buying opportunity for these three, as long as you have a long-term mindset.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $509,884!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $700,739!*

Now, it’s worth noting Stock Advisor’s total average return is 820% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, 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. 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. Keithen Drury has positions in Alphabet, Amazon, Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.