Key Takeaways
- The Nasdaq‑listed growth sector experienced a sharp sell‑off in March, creating attractive entry points that many investors captured.
- Even after the subsequent rally, several large‑cap stocks—including Microsoft, Broadcom, and Nvidia—remain well below their all‑time highs, suggesting further upside.
- Valuation metrics such as operating‑profit‑based P/E ratios indicate Microsoft is still cheap relative to its historical range.
- AI‑driven demand is expected to fuel multi‑year revenue expansion for Broadcom and Nvidia, with analysts forecasting more than a doubling of sales by 2027.
- Combining an undervalued stalwart like Microsoft with high‑growth AI chips makers could produce a portfolio that outpaces broad market indexes over the next few years.
- Missing the short‑term rally does not disqualify investors from benefiting from the long‑term momentum still present in the Nasdaq growth space.
Market Context: A March Sell‑off Created Buying Opportunities
"Growth stocks on the Nasdaq exchange have been some of the market’s best performers over the past few years. However, last month they were heavily sold off." This downturn opened “several fantastic buying opportunities,” and those who acted saw their positions “nearly unanimously risen from their lows at the end of March.” The article notes that while the recent rally may have left some feeling they “missed the boat,” the underlying momentum remains strong.
Microsoft Still Lagging Its Peak Despite Recent Gains
Even after the bounce, “Microsoft (MSFT +2.11%) is off more than 20% from its all-time high (although it was down as much as 34% at its low point).” The author argues that the stock’s valuation looks cheap when measured by operating profits, which strip out one‑time tax charges and investment gains. “From this standpoint, it still looks cheap.” The piece adds that investors can still acquire MSFT “for nearly the same price as during the 2023 sell‑off, which turned out to be a great opportunity.”
Valuation Lens: Operating‑Profit P/E Shows Microsoft’s Discount
To substantiate the claim, the article references an operating‑profit‑based P/E ratio chart (MSFT Operating PE Ratio, data by YCharts). By focusing on operating earnings, the metric removes distortion from non‑recurring items, offering a “clearer look into how Microsoft’s stock has been priced over the past decade.” This approach supports the view that the stock remains undervalued relative to its historical range.
Broadcom and Nvidia Have Surged but Still Have Room to Run
The text acknowledges that “Broadcom (AVGO +0.62%) and Nvidia (NVDA +4.30%) have rallied to nearly all-time highs.” Yet it quickly counters that sentiment: “there’s no sugarcoating it: If you’re a month late to the party, stocks like Broadcom and Nvidia have rallied to nearly all-time highs. However, these stocks are expected to grow significantly over the next few years, and there is still significant upside from here.” The underlying thesis is that short‑term price moves should not deter long‑term believers.
AI Chip Demand Fuels Massive Growth Projections for Nvidia
Nvidia’s CEO Jensen Huang is quoted as saying the company has “$1 trillion in cumulative orders for its Rubin and Blackwell chips through 2027.” For perspective, its trailing‑12‑month revenue was about $216 billion. The article notes that “Wall Street analysts expect revenue to more than double from now until the end of 2027,” underscoring the scale of the AI‑driven opportunity.
Broadcom’s AI Chip Business Poised for a Revenue Surge
Similarly, Broadcom’s CEO Hock Tan predicts that its custom AI chip segment “will generate more than $100 billion in revenue by the end of next year, more than triple its current level.” Wall Street mirrors this optimism, projecting revenue to rise from $64 billion in fiscal 2025 to $158 billion in fiscal 2027. The piece highlights that both firms design and oversee the manufacturing of AI computing chips, positioning them at the forefront of the “extreme AI buildout opportunity.”
Long‑Term Upside Remains Intact Despite Recent Rally
The author warns against being scared off by a “mere 20% to 30% run-up over the past month,” emphasizing that “the long-term upside of these two stocks is far greater than the rally they have undergone over the past month.” By anchoring expectations to multi‑year AI infrastructure spending, the article suggests that share prices could “double over the next two years based on growth alone.”
Combining Microsoft with AI Leaders Forms a Powerful Trio
Throwing an undervalued stock like Microsoft into the mix creates “a recipe for three stocks that can dramatically outperform the market indexes over the next few years.” The rationale blends Microsoft’s steady, cash‑generative enterprise software and cloud business with the explosive growth prospects of Broadcom and Nvidia’s AI hardware. Together, they offer exposure to both stable earnings and high‑octane expansion.
Final Thought: Missing the Short‑Term Rally Is Not a Deal‑Breaker
The conclusion reassures readers that “there is plenty of momentum in this space, and still plenty of upside for countless Nasdaq stocks.” Even if an investor arrived after the March sell‑off, the structural drivers—AI investment, cloud expansion, and enterprise software demand—remain intact. The article’s tone is optimistic, urging a focus on fundamentals rather than short‑term price movements.
https://www.fool.com/investing/2026/04/25/the-best-time-to-buy-artificial-intelligence-ai-gr/