3 AI Stocks to Buy on the Recent Tech Dip
Key Points
Broadcom has a huge custom-chip opportunity.
Amazon is just hitting its stride as a leader in e-commerce and cloud computing.
ServiceNow looks poised to be a leader in agentic AI orchestration.
- 10 stocks we like better than Broadcom ›
After a huge run this spring, the tech sector took a breather, giving back some of its big gains. During this pullback, several artificial intelligence (AI) stocks were hit harder than others. However, many of these stocks look well positioned for the long term and are strong rebound candidates.
Let's look at three AI stocks that were overly punished and could be great buys for the long haul.
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1. Broadcom: A huge custom chip and networking opportunity
Broadcom (NASDAQ: AVGO) not only got swept up in the recent tech sell-off, but investors also sold off the stock after the company didn't raise its fiscal 2027 outlook for AI chip revenue. Broadcom is still in the middle of its fiscal 2026 year, so there was no need to be pushing up this number so soon.
Nonetheless, the company has a huge AI opportunity. It's one of the go-to businesses to help hyperscalers develop custom AI accelerators.
Broadcom is currently riding the wave of Alphabet's success with its tensor processing units (TPUs), which it co-developed, and the huge amount it is spending on AI infrastructure. Broadcom projects its AI chip revenue will exceed $100 billion next fiscal year, which is more than the $64 billion in total revenue it generated in fiscal 2025.
The company is also a leader in co-packaged optics and data center networking, which feed directly into its custom chip business. With such a huge opportunity, this is a stock you want to pick up on this dip.
2. Amazon: The e-commerce and cloud leader
Amazon (NASDAQ: AMZN) was another stock that took a hit in the recent tech sell-off. However, this is a company that is just starting to really hit its stride.
In its e-commerce business, the company is seeing tremendous operating leverage with investments in AI and robotics. In the retail space, Amazon is far ahead in these areas, and it is really helping drive efficiencies and cost savings, which are leading to strong profit growth. This is an underappreciated part of its story, and the company doesn't get nearly enough credit for being the largest maker and operator of robots in the world, largely because it uses them internally.
The same can be said about its chip segment. This is a $20 billion run-rate business, but it's closer to $50 billion when taking into account internal use. This use saves Amazon on capital expenditures and inference expenses.
The company has good momentum in its cloud computing business, Amazon Web Services (AWS), with large commitments and partnerships with Anthropic and OpenAI. AWS revenue growth has been accelerating and should continue to pick up through the rest of the year.
Overall, with leading e-commerce and cloud businesses, Amazon is a top stock to pick up on this pullback.
3. ServiceNow: An agentic AI winner
ServiceNow (NYSE: NOW) had started to recover from the sell-off in software-as-a-service (SaaS) stocks this spring, only to see its shares pushed back down in this latest tech dip. However, the company remains one of the most intriguing beaten-down SaaS stocks, looking very well positioned to be an AI beneficiary.
The company's strength lies in the fact that its platform is used by information technology departments to run their entire software stacks. Its configuration management database is entrenched in its customers' workflow and data, and it maps the structural relationships among hardware, software, cloud services, and business processes.
This makes it an irreplaceable system of record and is the foundation of its push into agentic AI orchestration. Its new AI Control Tower monitors every AI agent model running within a business, making sure they follow governance rules and are performing as advertised.
With agentic AI still in its early phases, this is an enormous opportunity, and ServiceNow looks like the company best positioned to become the leader in this space.
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Geoffrey Seiler has positions in Alphabet, Amazon, Broadcom, and ServiceNow. The Motley Fool has positions in and recommends Alphabet, Amazon, Broadcom, and ServiceNow. The Motley Fool has a disclosure policy.
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