The recent pullback in artificial intelligence (AI) semiconductor stocks presents a strategic entry point for investors. While market leader Nvidia (NASDAQ: NVDA) has declined 23% from its 2025 highs, its fundamental position in AI infrastructure remains unshaken. This correction extends across the chip sector, creating opportunities in companies like Taiwan Semiconductor Manufacturing (NYSE: TSM), Applied Materials (NASDAQ: AMAT), and emerging players like Nebius Group (NASDAQ: NBIS).
Nvidia’s 23% decline year-to-date reflects concerns about Chinese competition and shifting U.S. tariffs rather than diminished AI demand. The company’s Blackwell GPU architecture positions it to dominate both AI training and inferencing markets, with CEO Jensen Huang projecting “a trillion dollars of installed data center infrastructure” requiring upgrades[7][8]. At 24x forward earnings, Nvidia trades below the S&P 500’s average despite leading the $1 trillion data center chip market[5][6].
As Nvidia’s primary manufacturing partner, TSMC (NYSE: TSM) benefits from both AI growth and U.S. reshoring initiatives. Its $100 billion U.S. expansion aligns with Big Tech’s projected $300 billion AI infrastructure spend in 2025[1]. Trading at 21x earnings versus Nvidia’s 37x, TSMC offers discounted exposure to the AI supply chain[1][2].
Down 33% from highs, Applied Materials (NASDAQ: AMAT) provides critical tools for AI chip production. Its 17.7 forward P/E ratio discounts long-term semiconductor capex growth projected at 9% annually through 2030[4]. The company’s metrology systems enable advanced packaging techniques required for next-gen AI chips[4].
Marvell (NASDAQ: MRVL) combines optical networking expertise with custom AI silicon development. Its data center revenue surged 78% YoY in Q4 2024, driven by demand for high-speed interconnects in AI server racks[5][6]. The stock’s 33% YTD decline overlooks its $3.2 billion AI-related design pipeline[6].
Nvidia’s recent stake in Nebius Group (NASDAQ: NBIS) highlights this data center specialist’s role in deploying Blackwell GPUs. With facilities spanning Europe and North America, Nebius could capture 15-20% of the $42 billion AI data center construction market by 2026[3].
Diversify across the AI stack:
This balanced approach captures AI growth while managing risks from geopolitics and interest rates. The semiconductor sector’s 4.1% projected CAGR through 2030, accelerated to 9.3% by AI demand, justifies accumulating quality names during dips[5][9].
The form has been successfully submitted.
