The stock market’s jitters are spreading quickly. Just a few weeks after major market indexes peaked, stocks are plunging with the Nasdaq Composite index already having entered a correction (a decline of more than 10% from a recent peak).
Stocks fell sharply for the third straight day on Monday as investors wrestled with downbeat economic data and a shock in Japan after the Nikkei fell double-digits as the Bank of Japan surprised investors with a rate hike. That action began a massive unwinding of a global “carry trade” in which investors were borrowing yen at near-zero rates and investing it elsewhere.
Seeking Opportunities Amid the Chaos
Seasoned investors know that while stock market sell-offs are scary, they also offer good buying opportunities. No one knows how long this correction will last, but it’s a good idea to have a list handy of stocks to buy if the decline continues. Keep reading to see three top stocks that are on sale right now.
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1. Alphabet: Weathering the Storm
Alphabet has been a top tech stock for over a decade, a starring member of both the FAANG stocks and the “Magnificent Seven,” and its eminent position shows no signs of changing, despite the upheaval from generative AI technology.
Alphabet has overcome early doubts about its AI capabilities and has continued to put up strong growth in recent quarters. It’s also driven margins higher thanks in part to a round of layoffs last year. Its core digital advertising business led by Google Search continues to deliver solid growth, and its cloud computing business has ramped up profits after years of losses.
2. Taiwan Semiconductor Manufacturing: A Steady Ship
Taiwan Semiconductor Manufacturing, or TSMC, is the world’s largest contract semiconductor foundry. It’s an essential cog in the global economy during normal times, but in the AI revolution, it’s become even more valuable as it makes roughly 90% of the world’s advanced chips. It’s established a competitive advantage through its technology, customer relationships with the likes of Apple, Nvidia, AMD, and Broadcom, large capacity, and a history of execution.
Like the rest of the semiconductor sector, TSMC is subject to cyclical forces, but its business has been on an upswing following a slowdown in the sector a year ago. In the second quarter, revenue jumped 40%, while net income was up by a similar rate.
3. Advanced Micro Devices: Seizing the Moment
Advanced Micro Devices might not seem as resilient as the other two stocks on this list, but the chipmaker deserves a closer look following a strong earnings report last week.
AMD is down by more than 40% from its peak in March, but the stock is also down 28% from the Nasdaq peak just a few weeks ago. Part of the reason for those gains is the dismantling of rival Intel, which announced significant cuts and disappointed with its quarterly results.
Capitalizing on the Chaos
That’s opened up an opportunity for AMD, and the company already seems to be capitalizing on the AI data center market with its new Mi300 chip. In the second quarter, AMD reported a 115% jump in data center revenue to $2.8 billion, the segment driving the AI boom. While weakness in the embedded and gaming segments weighed on overall revenue growth, the momentum in the data center market bodes well for future results.
In Conclusion
As the storm rages in the Nasdaq, these three stocks offer potential safe harbors for investors. While the market may be volatile now, history has shown that turbulent times often create the best opportunities for those with a keen eye and a steady hand. Stay alert, do your research, and consider adding these stocks to your watchlist as you weather the current market turbulence.
Invest wisely, dear reader, and may your portfolio weather the storm with resilience and prosperity.
