Recommend American artificial intelligence (AI) stocks suitable for buying in the current downturn

Analysis of Recommended U.S. AI Stocks Amid Current Market Downturn

Based on 2025 market projections, the U.S. AI industry continues to demonstrate robust growth (CAGR 19.33%). However, macroeconomic volatility, trade policy uncertainties, and downward revisions to earnings expectations have led to undervaluation of some high-quality AI companies. The following recommendations combine industry trends, technological moats, valuation levels, and policy support to identify six high-potential stocks:

1. Amazon (NASDAQ: AMZN)

• Key Strengths: AWS cloud services integrate AI tools (e.g., Bedrock platform supports third-party large model deployment), with annualized revenue reaching USD 115 billion. Generative AI enhances retail search and recommendation accuracy. The 2024 launch of the Store Companion AI tool optimized operations across nearly 2,000 stores.
• Financials/Valuation: Forward P/E (PEG) ratio <1, significantly below peers; cloud business margin rebounded to 29%, with AI-related revenue exceeding 40%.
• Risks: Slowing e-commerce growth, antitrust regulatory pressure.
• Investment Thesis: Dual drivers of cloud and retail in AI implementation, clear valuation upside.

2. NVIDIA (NASDAQ: NVDA)

• Key Strengths: Dominates >80% of AI chip market; DGX supercomputers power large model training. Next-gen Blackwell GPU architecture (2025 launch) boosts computing power by 5x. Expanding partnerships in healthcare and autonomous driving (e.g., Target for inventory management AI).
• Financials/Valuation: 2025 revenue growth forecast at 35%, P/E of 30x below 5-year average; free cash flow covers R&D expenses by 3x.
• Risks: Supply chain bottlenecks, rising competition (AMD, in-house chip developers).
• Investment Thesis: Irreplaceable hardware leader with resilient demand.

3. Target Corporation (NYSE: TGT)

• Key Strengths: Retail AI transformation leader; Store Companion chatbot serves 400k employees, improving inventory prediction accuracy to 94.5%. Digital revenue reached 22% in 2024, with AI-driven gross margin expansion to 29.8%.
• Financials/Valuation: P/B ratio of 1.2x (industry average 1.8x), defensive dividend yield of 3.5%.
• Risks: Weak consumer demand, high costs of physical store transformation.
• Investment Thesis: Undervalued AI-driven disruptor in traditional retail, high yield + margin upside.

4. Alphabet (NASDAQ: GOOGL)

• Key Strengths: Google Cloud AI solutions hold 28% enterprise market share; Gemini large model leads in multimodal capabilities. Healthcare partnerships (e.g., Mayo Clinic) streamline diagnostics.
• Financials/Valuation: Forward P/E of 18x, USD 140 billion cash reserves for M&A; AI-optimized ads drive 12% revenue growth.
• Risks: EU Digital Markets Act compliance costs, search market share erosion.
• Investment Thesis: Complete tech ecosystem with recession-resistant cash flow.

5. Innodata (NASDAQ: INOD)

• Key Strengths: Data engineering leader, supplying training datasets to Microsoft and AWS for legal, healthcare, and other verticals. AI-related revenue surged 78% in 2024, with 95% client retention.
• Financials/Valuation: USD 1.5 billion market cap, P/S ratio 2.3x (industry average 6x); 2025 revenue growth forecast at 45%.
• Risks: Overreliance on key clients, margin volatility (Q4 2024: 38%).
• Investment Thesis: Undervalued data infrastructure pure-play with high growth potential.

6. MicroStrategy (NASDAQ: MSTR)

• Key Strengths: Dual strategy—214,000 bitcoins (valued at ~USD 14 billion) + AI analytics software (MicroStrategy ONE platform holds 19% market share). 2025 launch of Auto™ chatbot for clients like Pfizer and Visa.
• Financials/Valuation: Analyst target price USD 514 (50% upside from USD 340), but negative P/E; monitor Bitcoin price volatility.
• Risks: High debt (USD 3.7 billion convertible notes), crypto regulatory risks.
• Investment Thesis: High-risk, high-reward bet on Bitcoin-AI synergy.

Investment Strategy Recommendations

• Core Holdings: Amazon, NVIDIA (industry leaders with strong moats).
• Satellite Positions: Target, Innodata (niche disruptors + valuation rebound potential).
• Hedging Options: Alphabet (defensive cash flow) + MicroStrategy (high-risk beta).

Risk Warnings: Slower-than-expected macroeconomic recovery, tightening AI ethics regulations, technology disruption. Consider accumulating positions in batches and dynamically rebalance the portfolio.