The Great Repricing Is Creating Generational Opportunities in Agentic AI Growth Stocks

Many technology stocks have been absolutely slammed over the past six months, as investors try to determine which companies will accelerate because of artificial intelligence (AI) and which will be left in the dust.

But the funny thing about investors is that, unsurprisingly, they don't always get things right.

The massive sell-offs in software and hardware tech stocks have left some high-growth companies that are benefiting from agentic AI looking like great deals.

Here are two to buy now.

Image source: Getty Images.

Hardware is still king in the agentic AI era

You can't have an agentic AI that builds websites or writes its own code for new products without first having the data center infrastructure in place to support it.

And no company is benefiting more from data center growth -- now and in the future -- than Nvidia (NASDAQ: NVDA). The company's chip designs hold 86% of the AI data center processor market, and more spending on infrastructure is on the way, with Alphabet, Microsoft, Amazon, and Meta collectively spending $650 billion this year alone.

Nvidia's sales increased 20% to $68 billion in Q4, and non-GAAP earnings per share spiked 82% to $1.62 per share. Despite those results and increased spending by tech companies for more AI infrastructure, Nvidia's shares have slid 12% over the past five months.

That's made Nvidia's shares relatively well-priced, with a forward price-to-earnings ratio of just 21.5, on par with the tech-heavy Nasdaq-100's forward P/E of 21.

It's far too early to say that technology companies won't need more data center capacity in the coming years, even if they get more efficient, because it's simply too soon to know what products and services will come from agentic AI.

With its strong sales and earnings, an enviable market position in AI processors, and shares looking like a relatively good deal, Nvidia stock is a strong buy right now.

Enterprise software will evolve, not go extinct

Some of the biggest market sell-offs recently have come from software stocks, as investors worry that artificial intelligence will eliminate the need for specific apps. What's wrong with that perspective is that enterprise systems are integral to many large companies' workflows and trusted by those companies.

And that's why ServiceNow (NYSE: NOW) may have an advantage over the long term as it leans into AI. With more than 85% of Fortune 500 companies and 8,400 customers using ServiceNow's workflow automations, large companies will likely be reluctant to abandon systems and software that work well.

ServiceNow is adapting to the AI era by adding virtual agents, an agent studio for companies to create their own agents, and integrations with Microsoft's Azure cloud and Anthropic to evolve alongside customer needs. And the company is also growing rapidly, with sales rising nearly 21% to $3.6 billion and earnings increasing 31% to $0.92 per share in the fourth quarter.

With tech companies using more than 80 billion ServiceNow workflows, it's unlikely the company will be fully replaced by AI any time soon. Instead, it's more likely that ServiceNow will continue to add more agentic services to its platform, improving on existing features.

And with shares trading at just 24.8 times the company's forward earnings, ServiceNow stock looks relatively well-priced right now.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and ServiceNow. The Motley Fool has a disclosure policy.