The S&P 500 had a dream run in the first half of this year, surging 15% with almost no volatility. But it has declined by 5.7% since peaking in July as investors digest weak economic data combined with a currency shock in the Japanese yen.
History suggests the S&P 500 always climbs to new highs given enough time, so this correction is likely a buying opportunity. In fact, this might be a great chance for investors to buy artificial intelligence (AI) stocks at a discount, ahead of what could be significant long-term growth.
According to many Wall Street forecasts, AI could add trillions of dollars to the global economy in the coming decade, with contributions from both hardware and software companies. Here’s why investors with $1,000 to spare might want to split it equally between shares of Advanced Micro Devices (NASDAQ: AMD) and Lemonade (NYSE: LMND) right now.
1. Advanced Micro Devices
AMD has emerged as a worthy competitor to Nvidia in the market for AI data center chips. Its new MI300X graphics processing unit (GPU) is already a hit among some of the world’s largest data center operators like Microsoft and Oracle, and many customers are finding performance and cost advantages over Nvidia’s industry-leading H100.
But with Nvidia about to launch its next-generation GPUs built on its new Blackwell architecture — which could be up to 5 times faster than its H100 — AMD can’t afford to stand still. That’s why it plans to launch the MI350 next year, and it will be based on a new architecture called Compute DNA (CDNA) 4, which could deliver 35 times more performance than CDNA 3 chips like the MI300. AMD hopes this generation of GPUs will compete directly with Nvidia’s Blackwell GPUs.
But AI is now coming to personal computers and devices, which means AI will be processed on-device rather than relying on data centers to handle each query. That will create a faster user experience when engaging with AI chatbots and other software. AMD just released the Ryzen AI 300 series for notebooks, which is the fastest neural processing unit (NPU) in the industry. The company says…
..
