Stock Market Dip Anticipates AI Sector Recovery Ahead

The stock market has faced a pullback, particularly affecting AI stocks. Despite some concerns, growth in artificial intelligence is anticipated to continue, making it a potential investment opportunity, notably for Datadog and Advanced Micro Devices.

Date: 15-03-2025

AI Rating: 6

The recent stock market pullback has raised concerns among investors, particularly affecting stocks within the artificial intelligence (AI) sector. However, experts forecast significant growth in the AI market, with projections climbing from $233 billion in 2024 to $1.77 trillion by 2032. This growth represents a key opportunity for investors to capitalize on underpriced AI stocks.

Datadog Analysis: Datadog (NASDAQ: DDOG) has shown a recent downside due to its conservative outlook on revenue growth and earnings growth. Analysts have adjusted their forecasts downwards, which may dampen investor sentiment. However, Loop Capital's price target of $200 suggests an 82% upside potential. Datadog's expanding total addressable market, bolstered by increased demand for its services from 'AI-native customers', presents a favorable situation for future earnings growth.

Advanced Micro Devices Analysis: Advanced Micro Devices (NASDAQ: AMD) is also under scrutiny after its latest earnings call indicated a 7% sequential decline in total sales for the first quarter. Additionally, its data center segment, which includes AI chips, is expected to mirror this decline. Despite disappointing forecasts, analysts speculate a considerable upside of 124% from its current position, underpinned by expectations of significant market share growth in the rapidly expanding data center GPU market.

Despite these setbacks, both companies remain strong players in the AI market sector, and analysts are optimistic about future growth, making them potentially appealing to long-term investors.

Stocks: DDOG AMD