Warren Buffett once said, “Be fearful when others are greedy, and greedy when others are fearful.” With that in mind, here are three tech stocks that investors should invest in now that others are fearful.
1. Alphabet
Alphabet (NASDAQ: GOOGL) Shares have fallen recently on concerns about growing competition in the search engine business and a court ruling that the company’s Google search engine is a monopoly.
While Alphabet has been found guilty of antitrust practices, it will likely take some time before a final resolution of the court ruling and what remedies are put in place. It wouldn’t be surprising if it takes until 2026. The court ruling focused largely on the company’s payments to smartphone makers to become the exclusive default search engine for their mobile devices, so changes to those agreements are likely.
Meanwhile, investors are concerned about the financial implications of artificial intelligence (AI) for Google’s business model and the impact on the company of AI-powered search engines from companies like OpenAI and Perplexity.
Both problems seem more than manageable. First, Alphabet has begun to innovate in search, not just through AI, but also with features like visual search and circle to search. The former lets users perform a search using the smartphone’s camera, while the latter lets users draw a circle or even scribble on an image or text to get more information about a topic, without leaving an app.
With Alphabet’s decades of data, a brand synonymous with internet search, a business that generates massive cash flows, and new monetization opportunities arising from AI, it won’t be easy for a money-losing, sub-scale competitor to make any meaningful encroachment on Google’s search dominance. While the court’s ruling will likely make it easier for users to switch their default search engines, the company has about two years to ensure that not many people will want to by further extending its technological lead in search.
With a forward price-to-earnings (P/E) ratio of less than 19, the stock is a bargain given the growth opportunities it offers.
2. Taiwanese semiconductor production
Shares of Taiwanese semiconductor manufacturer (NYSE:TSM)or TSMC for short, was sold off earlier this summer following news of tighter export restrictions on semiconductors to China, and comments from presidential candidate Donald Trump claiming that Taiwan had taken over 100% of the US chip business and that the country should pay for its own military.
While there are certainly geopolitical risks to investing in TSMC, given Taiwan’s importance to chip manufacturing and the chaos it would cause if there were a disruption, these risks are likely overblown. In the meantime, as the world’s leading semiconductor contract manufacturer, the company will continue to benefit handsomely from the buildout of AI infrastructure.
The company’s revenue grew nearly 33% year-over-year in Q2 to $20.8 billion, while it recently reported that July was its best sales month ever, with revenue growing 45% for the month. The company has been ramping up production to meet high demand, and expects to raise prices by as much as 10% on some smaller nodes next year. This should lead to some very nice growth next year.
The stock is trading at a price/earnings ratio of 20 times expected price/earnings, based on analyst estimates for 2025. Given its growth prospects, the stock is too cheap to ignore.
3. Nvidia
After a strong run, shares of Nvidia (NASDAQ: NVDA) have pushed back on concerns that the stock has risen too quickly and that there would be delays for the latest Blackwell chip. While the latter is likely true, demand for the chips is so high that it will likely have only a minimal impact on results as customers continue to buy the current generation of Hopper chips instead.
While there is some concern that spending on AI infrastructure may slow, the comments from the major companies involved in the AI buildout all point to higher investments going forward. Right now, the concern among customers is not about overbuilding capacity, but about not building enough capacity. Meanwhile, as large language models (LLMs) become more sophisticated, the more computing power they will require.
For example, Meta platforms recently said that the Llama 4 LLM would likely require 10 times the computing power to train compared to Llama 3. That means it would need many more Nvidia graphics processing units (GPUs).
With demand showing no signs of slowing, Nvidia stock appears cheap, trading at less than 30 times next year’s consensus earnings. This seems like a good time to buy the dip.
Should You Invest $1,000 in Alphabet Now?
Before you buy Alphabet stock, here are some things to consider:
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former chief market development officer and spokeswoman for Facebook and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Geoffrey Seiler holds positions at Alphabet. The Motley Fool holds positions at and recommends Alphabet, Meta Platforms, Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
The Best Stocks to Invest $50,000 In Right Now was originally published by The Motley Fool
