Technology stocks have hit a rough patch of late as investors have been looking to reduce their exposure to riskier assets in the wake of the tariff-induced trade war, leading to an increase in demand for safer investments.

Moreover, investors are worried that a potential increase in manufacturing costs on account of the tariffs imposed by the Trump administration could hurt the prospects of technology companies. So, it is easy to see why investors have become risk-averse of late and are booking profits in tech stocks that delivered impressive gains in 2023 and 2024 thanks to a big catalyst in the form of artificial intelligence (AI).

All this explains why the Nasdaq Composite index has entered correction territory. As of Monday’s market close, the index was down 13% from its most recent high achieved on Dec. 16 last year. A drop of 10% to 20% in a major index qualifies as a stock market correction, and it remains to be seen how long the ongoing one may last.

But then, the recent sell-off in AI stocks has also opened an opportunity for savvy investors to buy top companies at incredibly cheap valuations. I will take a closer look at two Nasdaq stocks in this article that have retreated significantly of late but are sitting on incredible long-term growth opportunities.

Investors are getting a terrific deal on this ad tech stock
The Trade Desk (TTD) stock has plunged nearly 49% already in 2025, and that’s great news for investors as it is trading at a very attractive valuation right now. More specifically, shares of the programmatic advertising company can be bought at 12 times sales, a huge discount to its price-to-sales ratio of 25 at the end of 2024.

A big reason why The Trade Desk has retreated so much is because of its poor performance in the fourth quarter of 2024. The company released its results last month and the stock plunged big time as it missed its own revenue expectations thanks to execution issues. However, investors should not miss out on the bigger picture.

The Trade Desk operates in the programmatic advertising market, an industry that’s expected to generate a whopping $2.75 trillion in revenue by the end of the decade. Programmatic advertising refers to the automated purchasing and selling of ad inventory with the help of AI and machine learning tools, and it allows advertisers to serve ads to the right audience at the right time on the right channel based on real-time data.

One thing worth noting is that The Trade Desk has been integrating AI tools into its programmatic advertising platform since 2017. It continues to “look for opportunities to inject AI into our platform,” according to CEO Jeff Green. The adoption of AI in the digital ad market is expected to grow at a healthy annual pace of 22.5% through 2033, according to a third-party estimate.

So, even though The Trade Desk may face near-term challenges on account of the structural changes that it is making to its sales force and organization, the massive opportunity in the programmatic ad market suggests that it could once again get back on the path of growth. Indeed, analysts are expecting The Trade Desk’s growth to accelerate once again.

The company ended 2024 with adjusted earnings of $1.66 per share. Analysts are expecting single-digit growth in its bottom line this year, followed by a solid acceleration over the next couple of years.

So, the sharp drop in The Trade Desk this year gives investors the chance to buy this AI stock on the cheap, and they may not want to miss this opportunity.

This AI chip stock is a no-brainer buy after this event
If you’re looking to add a top AI chip stock to your portfolio right now, look no further than Broadcom (AVGO 3.06%). The company’s AI revenue is growing at an incredible pace as customers have been lining up to buy its custom processors and networking chips to tackle AI workloads in the cloud. Specifically, Broadcom’s AI revenue shot up a remarkable 77% year over year in the first quarter of fiscal 2025.

That was nine percentage points higher than Broadcom’s original expectation. What’s worth noting is that Broadcom is scratching the surface of a massive AI-related opportunity. The company currently serves three hyperscale cloud customers, who have been deploying its custom AI processors and networking chips in their data centers.

It sees a serviceable addressable market worth $60 billion to $90 billion for its AI chips from these three hyperscale customers over the next three fiscal years. That’s much higher than the $16 billion annual revenue run rate that its AI business is currently clocking (based on fiscal Q1 revenue of $4.1 billion). However, Broadcom’s AI-focused revenue opportunity could be much larger than what it has outlined since it does not count the four additional hyperscalers that it is working with to develop custom AI processors.

Not surprisingly, analysts have raised their revenue growth expectations for the next three fiscal years.

The impressive top-line growth is expected to filter down to the bottom line as well, with analysts expecting a 36% increase in Broadcom’s earnings in the current fiscal year to $6.61 per share. Given that Broadcom is trading at 28 times forward earnings right now, which isn’t all that expensive when compared to the 30x earnings multiple of the Nasdaq-100 index, investors are getting a good deal on this semiconductor stock that seems on track to deliver robust earnings growth this year.

What’s more, Broadcom’s huge addressable opportunity suggests that it can maintain healthy levels of growth in the long run as well, making it a no-brainer buy right now following its 20% decline in 2025 so far.

— Harsh Chauhan

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