5 AI Giants to Buy on the Dip Amid Huge Short-Term Upside Potential

U.S. stock markets have been enduring severe volatility over the past month. Wall Street’s recent turmoil is broad-based. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — are in negative territory year to date. The S&P 500 and the Nasdaq Composite are, in fact, in a correction zone. Moreover, the mid-cap-centric S&P 400 is in the red and the small-cap benchmark Russell 2000 is in the bear territory, year to date.

Sector-wise, the technology space, particularly artificial intelligence (AI) infrastructure developers, has suffered the most. However, the AI frenzy remains intact as big techs have undertaken a massive expenditure plan for AI. Meanwhile, the recent downturn in stock prices have made several AI infrastructure stocks highly lucrative.

Five such stocks with a favorable Zacks Rank and attractive short-term price upside potential are: NVIDIA Corp. NVDA, Broadcom Inc. AVGO, Arista Networks Inc. ANET, Marvell Technology Inc. MRVL and Atlassian Corp. TEAM.

5 AI Infrastructure Giant to Buy for Fabulous Short-Term Gains

The above-mentioned five AI infrastructure behemoths have strong revenue and earnings potential for 2025. These stocks have seen positive earnings estimate revisions in the last 30 days. Each of our picks currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The chart below shows the price performance of our five picks year to date. 

Image Source: Zacks Investment Research

NVIDIA Corp.

NVIDIA has been able to keep the flag high with its path-breaking vision, innovation and solid execution, irrespective of recent headwinds. NVDA reported outstanding fourth-quarter fiscal 2025 earnings results and guided an equally bright guidance for first-quarter fiscal 2026.

This was primarily buoyed by rock-solid demand for its AI-powered GPUs that downplayed the Chinese DeepSeek-related availability of low-cost solution concerns. CEO Jensen Huang said that the next-generation AI model requires more computing power. Per Huang, “The amount of computation necessary to do that reasoning process is 100 times more than what we used to do.”

In addition to Blackwell, on June 2, 2024, NVDA unveiled its new AI chip architecture called Rubin. The Rubin architecture will have new GPUs to launch AI systems, CPUs and networking chips. It will also have new features like a central processor called Vera. Rubin is expected to be introduced in 2026.

Excellent Short-Term Price Upside Potential for NVDA Stock

NVIDIA has an expected revenue and earnings growth rate of 50.9% and 46.8%, respectively, for the current year (ending January 2026). The Zacks Consensus Estimate for current-year earnings has improved 4.3% in the last 30 days. It has a long-term (3-5 years) earnings growth rate of 25.7% compared with the S&P 500’s growth rate of 12.7%.

NVDA currently carries a forward P/E of 27.73X for the current-year, compared with 29.06X for the industry and 18.14X for the S&P 500. It has a return on equity (ROE) of 112.33% compared with 6.44% for the industry and 16.98% for the S&P 500.

NVIDIA is currently trading at a 20.5% discount to its 52-week high price. Year to date the stock has fallen 9.4%. The short-term average price target of brokerage firms for the stock represents an increase of 52.8% from the last closing price of $121.67. 

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Broadcom Inc.

Broadcom has been benefiting from strong demand for its networking products and custom AI accelerators (XPUs). In fiscal 2024, AI revenues jumped 220% over fiscal 2023 to $12.2 billion and represented 41% of semiconductor revenues. AVGO’s XPUs are necessary to train Generative AI models, and they require complex integration of compute, memory, and I/O capabilities to achieve the necessary performance at lower power consumption and cost. 

AVGO’s next-generation XPUs are in 3 nanometers and will be the first of its kind to market in that process node. Broadcom remains on track for volume shipment of these XPUs to its hyperscale customers in the second half of fiscal 2025. AVGO sees massive opportunities in the AI space as specific hyperscalers have started to develop their own XPUs. 

Broadcom believes that by 2027 each of its three hyperscalers would deploy 1 million XPU clusters across a single fabric. Serviceable Addressable Market for XPUs and network are expected between $60 billion and $90 billion in fiscal 2027 alone.

Attractive Short-Term Price Upside Potential for AVGO Shares

Broadcom has an expected revenue and earnings growth rate of 20.3% and 34.7%, respectively, for the current year (ending October 2025). The Zacks Consensus Estimate for current-year earnings has improved 4% in the last 30 days. 

AVGO has a long-term earnings growth rate of 19% compared with the S&P 500’s growth rate of 12.7%. The company has an ROE of 32.18% compared with 2.77% for the industry and 16.98% for the S&P 500. It has a current dividend yield of 1.21%.

Broadcom is currently trading at a 22.4% discount to its 52-week high price. Year to date the stock has slid 15.6%. The short-term average price target of brokerage firms for the stock represents an increase of 31.3% from the last closing price of $195.54. 

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Arista Networks Inc.

Arista Networks has been benefiting from positive demand trends owing to its strong product portfolio, which is highly scalable, programmable and provides data-driven automation, analytics and support services. 

ANET’s cloud networking solutions provide predictable performance and programmability, enabling seamless integration with third-party applications for network management, automation and orchestration. 

Arista Networks should benefit from its software-driven, data-centric approach that helps customers build their cloud architecture and enhance the cloud experience they offer their clients. The growing demand for 200- and 400-gig high-performance switching products augurs well for ANET’s long-term growth. Healthy growth in gross margin backed by improved supply-chain management is also a positive.

Huge Short-Term Price Upside Potential for ANET Stock

Arista Networks has an expected revenue and earnings growth rate of 18.1% and 12.8%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 5.8% in the last 30 days. 

ANET has a long-term earnings growth rate of 14.4% compared with the S&P 500’s growth rate of 12.7%. The company has an ROE of 29.91% compared with 0.81% of the industry and 16.98% of the S&P 500. 

Arista Networks is currently trading at a 37.4% discount to its 52-week high price. Year to date the stock has plummeted 24.4%. The short-term average price target of brokerage firms for the stock represents an increase of 53.7% from the last closing price of $83.51. 

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Marvell Technology Inc.

Marvell Technology is benefiting from the strong demand environment across the data center end market. In the last reported quarter, MRVL’s data center end market revenues increased 98% year over year and 25% sequentially, propelled by strong revenue growth across AI-driven demand for PAM products and ZR electro-optics. 

MRVL is a promising player in the solid-state drive controllers’ market. The storage market is seeing a steady increase in demand, given the fast-growing data volume, especially the exponential growth in unstructured data. Completion of inventory digestions is likely to aid growth for MRVL across the enterprise networking and carrier infrastructure end markets.

Astonishing Short-Term Price Upside Potential for MRVL Shares

Marvell Technology has an expected revenue and earnings growth rate of 43.6% and 75.2%, respectively, for the current year (ending January 2026). The Zacks Consensus Estimate for current-year earnings has improved 1.5% in the last 30 days. 

MRVL has a long-term earnings growth rate of 42.9% compared with the S&P 500’s growth rate of 12.7%. It currently carries a forward P/E of 25.01X for the current year, compared with 25.33X for the industry and 18.14X for the S&P 500. 

Marvell Technology is currently trading at a 46.1% discount to its 52-week high price. Year to date the stock plunged 37.7%. The short-term average price target of brokerage firms for the stock represents an increase of 76.1% from the last closing price of $68.74. 

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Atlassian Corp.

Atlassian has been benefiting from the rising demand for remote working tools amid the hybrid work trend and accelerated digital transformation. TEAM’s AI-powered capabilities are seeing rapid adoption, with over 1 million monthly active users engaging with Atlassian Intelligence features, marking a 25X year-over-year increase in AI interactions. 

Atlassian’s AI-powered Rovo platform and automation tools are driving 40% year-over-year growth in premium and enterprise editions, demonstrating high demand for AI-enhanced workflows. Investments in multi-model AI strategies and advanced search capabilities further differentiate TEAM’s offerings in an increasingly competitive landscape.

Atlassian’s latest focus on adding generative AI features to some of its collaboration software is likely to drive the top line over the long run. In April 2023, TEAM collaborated with OpenAI to enhance the capabilities of its Confluence, Jira Service Management and other programs with generative AI features. TEAM is offering gen AI-enabled features under the Atlassian Intelligence brand which is designed to help employees be more efficient while users remain in control of data.

Massive Short-Term Price Upside Potential for TEAM Stock

Atlassian has an expected revenue and earnings growth rate of 18.6% and 17.4%, respectively, for the current year (ending June 2025). The Zacks Consensus Estimate for current-year earnings has improved 7.8% in the last 60 days. TEAM has a long-term earnings growth rate of 20% compared with the S&P 500’s growth rate of 12.7%. 

Atlassian is currently trading at a 33% discount to its 52-week high price. Year to date the stock has tumbled 10.2%. The short-term average price target of brokerage firms for the stock represents an increase of 67% from the last closing price of $218.44.

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This article originally published on Zacks Investment Research (zacks.com).

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