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Tech Stocks in Correction: AMD and PayPal Highlighted

Tech stocks are in correction territory. Investors find opportunities in Advanced Micro Devices (AMD) and PayPal, both trading at attractive valuations amid market turbulence. Strong growth prospects for both companies could lead to substantial returns for long-term investors.

Date: 
AI Rating:   7
Market Correction and Opportunities

The Nasdaq Composite index is officially in correction territory, being 13% below its recent highs. With recession fears and potential tariff impacts weighing on the market, this environment may present buying opportunities for long-term investors. Two stocks stand out: Advanced Micro Devices (AMD) and PayPal.

Advanced Micro Devices (AMD)

AMD has demonstrated impressive performance, particularly in its data center business, which nearly doubled year-over-year revenue in 2024. Furthermore, AMD's adjusted Earnings Per Share (EPS) grew by 25% in 2024 and the company anticipates a 30% year-over-year revenue growth for Q1 2025. Given its solid growth strategy and valuation of about 21 times forward earnings, AMD presents a strong investment opportunity. The anticipated growth of the data center sector and autonomous vehicles further enhances its appeal.

PayPal

PayPal, while experiencing a decline in stock price after disappointing earnings, is trading at a valuation of less than 14 times expected 2025 EPS. The company has made notable improvements in its leadership and efficiency, resulting in EPS growth. Despite recent setbacks, PayPal has significant growth potential due to its plans for better monetization of Venmo and expanding its online payment services. The company generates approximately $6 billion in annual free cash flow, enhancing its ability to manage share buybacks and ultimately support its stock price.

Both companies demonstrate promising fundamentals amidst market volatility, but investors should remain cautious regarding short-term fluctuations.

Stocks:  AMD PYPL