Stock Market Rebound: 3 Top AI Bargains to Snap Up Now

Key Points
Stocks rallied in early trading after the U.S. halted attacks in Iran for two weeks.
Before the S&P 500 heads significantly higher, it’s a great idea to pick up quality stocks that have suffered in recent weeks.
- 10 stocks we like better than Nvidia ›
One thing is certain in investing: The stock market won't remain in the doldrums forever. History has shown that whenever major indexes decline or even crash, they've always recovered and gone on to gain. And this goes for shares of quality companies, too.
In recent weeks, indexes have swung from gains to losses amid geopolitical uncertainty. Turmoil turned to war between the U.S. and Iran, and investors worried as oil prices climbed and the Strait of Hormuz -- a critical waterway for industrial transit -- closed. Any news regarding the situation pushed indexes in one direction or the other, and the S&P 500, as of April 7, was heading for a 3.3% decline so far this year.
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But President Donald Trump offered investors hope later that evening when he halted attacks in Iran for two weeks to allow for negotiations. As part of the agreement, Iran said it would reopen the Strait of Hormuz during negotiations.
Meanwhile, early trading showed a rebound in the major indexes, suggesting investors are feeling more confident about what's ahead. It's too early to predict whether the rally will last, but as mentioned above, the stock market has an excellent track record of delivering investors a win over time. Against this backdrop, let's check out three bargain artificial intelligence (AI) stocks to snap up now...
1. Nvidia
Nvidia (NASDAQ: NVDA) offers investors a rare entry point at the moment as it trades at a dirt cheap valuation -- only 21x forward earnings estimates, its lowest in a year. And this compares to its average level over the past year of about 40x estimates.
The tech giant is the key player in the red-hot growth market of AI, as it provides a critical tool: the AI chip. Nvidia's graphics processing units (GPUs) are the fastest and most efficient available today, and the company's focus on annual innovation should keep it in this leading position.
AI demand is soaring, and the growth story is far from over, as AI is just beginning to be used in the real world. Companies across industries, from healthcare to robotics and automotive, are rushing to Nvidia for AI products and services to power their projects.
All of this means that Nvidia's mind-boggling earnings growth is likely to continue -- making this the AI stock to buy, particularly at today's price.
2. Meta Platforms
Meta Platforms (NASDAQ: META) is a social media giant as it owns popular apps such as Facebook and Instagram. But the company is setting itself up to be an AI winner of tomorrow.
The tech powerhouse has invested in data centers, built its own large language model, and even designs some of its own chips. Meta already is applying its AI systems to its social media platforms -- it offers an AI assistant, for example -- and it's using AI to supercharge the performance of ads on its platform. All of this should help boost advertising across Meta, which is key since this is the company's biggest source of revenue.
All of this innovation may lead to new products and services down the road, too. That's why I say that Meta might be a future AI winner, and as it progresses, the stock could rocket higher.
Meta has plenty of room to run because today it trades for only 19x forward earnings estimates -- a bargain considering its solid advertising growth engine and its AI potential.
3. Palantir Technologies
No one would call Palantir Technologies (NASDAQ: PLTR) a cheap stock, but if we look at past levels in the chart below, it clearly has come down in valuation by quite a bit.
Is this a major buying opportunity for investors? For growth investors, I say "yes," and here's why. First, it's important to put valuation into perspective. The forward P/E measure only accounts for earnings in the coming year -- not several years down the road. So it doesn't show the long-term picture. Also, many tech giants of today went through stages of high valuations, meaning that if investors stayed away, they would have lost out on great investment opportunities. Amazon and Nvidia are two examples.
Palantir's steady increases quarter after quarter in revenue, profit, and demand for its AI-driven software are positive signs that this momentum isn't just a trend. And its offering of software that allows customers to immediately apply AI to their needs should see high demand as the use of AI in the real world expands. That's why, at today's level, Palantir may be a stock to snap up now -- before it roars higher.
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Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Nvidia, and Palantir Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.