Tech Sell-Off: Two AI Stocks That Are Screaming Buys Right Now

AI stocks have skyrocketed in recent years due to the technology's potential to revolutionize various industries. The tech-heavy Nasdaq Composite has reached record highs, but recent headwinds, such as concerns about higher energy prices and the sustainability of data center expansion, have temporarily slowed the index's momentum.

The recent U.S. midterm elections, which saw Democrats win majorities in the Senate and House of Representatives, has raised concerns about potential regulation or slowdown in data center expansion, which could negatively impact AI development.

Despite these concerns, the long-term outlook for AI remains promising, making it a great time to invest in quality players that have declined recently. Two such stocks are Taiwan Semiconductor Manufacturing (TSM) and Broadcom (AVGO).

TSM plays a crucial role in the AI story as it manufactures the chips that power key AI tasks, including training and inference models. While TSMC benefits greatly from the AI boom, its other areas of focus, such as chips for smartphones, traditional PCs, and smart home appliances, can help support the revenue picture if the pace of AI development slows.

Currently, TSMC stock is trading at 22x forward earnings estimates, making it an attractive long-term buy. Broadcom, on the other hand, is a player in the AI chip market, designing custom chips for specific purposes, such as XPUs. Broadcom has been experiencing tremendous growth, thanks to its work with major hyperscalers and customers like OpenAI and Anthropic, with AI semiconductor revenue reaching $16 billion in the latest quarter.

With AI revenue projected to reach $230 billion by the 2028 fiscal year, Broadcom's well-established networking business and strength in networking and custom chips make it a long-term growth stock. Currently, Broadcom is trading at 16x forward earnings estimates, making it a screaming buy at today's levels.