Market Reaction to Tariffs

President trump’s announcement of worldwide tariffs caused meaningful market volatility. Major market indexes experienced declines, with the Nasdaq Composite (NASDAQINDEX: ^IXIC) briefly entering bear market territory, defined as a 20% drop from recent highs.

Strategic Investment Approach

Experienced investors understand that market corrections affect both strong and weak stocks, creating opportunities to buy top-tier companies at discounted valuations. One investor viewed the downturn as a chance to increase holdings in high-conviction stocks, deploying approximately half of available cash. Here are five stocks that were added to the portfolio:

Nvidia (NASDAQ: NVDA)

Nvidia has solidified its position as a key technology company with the rise of artificial intelligence (AI). Its graphics processing units (GPUs) are the industry standard for AI, essential for upgrading data centers to meet the demands of generative AI.

Concerns about slowing AI growth, export restrictions to china, and tariff impacts led to a roughly 37% decline in Nvidia’s stock price.

Though, the investor considered this an overreaction, noting that AI adoption is a long-term trend. In fiscal 2025 fourth quarter (ended Jan. 26), Nvidia’s revenue grew 78% year over year to $39 billion, while earnings per share (EPS) surged 82%. These results indicate continued growth potential in AI.

With a forward earnings multiple of 31, Nvidia is seen as attractively priced, especially given its growth rate.

Broadcom (NASDAQ: AVGO)

If Nvidia is the king of AI, Broadcom (NASDAQ: AVGO) could well be the queen. The company offers a vast array of semiconductors and infrastructure software solutions that power technology across the cable, mobile, broadband, and data center industries. This puts the company in pole position to benefit from the ongoing wave of digital change. Broadcom estimates that 99% of all internet traffic crosses through some type of Broadcom technology.

The data center opportunity is notably significant, as it is where most AI processing occurs, making Broadcom a crucial AI infrastructure provider.

In its fiscal 2025 first quarter, Broadcom’s revenue increased 34% year over year, and the company anticipates continued growth driven by AI demand.

Shopify (NYSE: SHOP)

Shopify (NYSE: SHOP) is a leading e-commerce platform that empowers businesses of all sizes to create and manage their online stores. The company has been expanding its offerings to include payment processing, shipping solutions, and marketing tools, making it a one-stop shop for merchants.

Shopify’s stock experienced a significant pullback due to concerns about slowing e-commerce growth and increased competition. However, the investor believes that Shopify’s long-term growth prospects remain strong, driven by the continued shift to online shopping and the company’s innovative product offerings.

In its most recent quarter, Shopify’s revenue grew 25% year over year, and the company is profitable on an adjusted basis. Shopify is also investing heavily in its platform to enhance the merchant experience and attract new customers.

The Trade Desk (NASDAQ: TTD)

The Trade Desk (NASDAQ: TTD) is a leading advertising technology company that provides a platform for advertisers to manage their digital advertising campaigns. The company’s platform allows advertisers to target specific audiences, optimize their campaigns in real-time, and measure the effectiveness of their ads.

The Trade Desk’s stock has been volatile due to concerns about the impact of privacy regulations on the digital advertising industry. However, the investor believes that The Trade Desk is well-positioned to navigate these challenges, as the company has been proactive in developing privacy-focused advertising solutions.

In its most recent quarter, The Trade Desk’s revenue grew 28% year over year, and the company is profitable.The Trade Desk is also expanding its platform to include new advertising channels, such as connected TV and audio.

Amazon (NASDAQ: AMZN)

Amazon (NASDAQ: AMZN) is a global e-commerce and cloud computing giant that has transformed the way people shop and businesses operate. The company’s e-commerce business is the largest in the world, and its Amazon Web services (AWS) cloud computing division is the leading provider of cloud infrastructure services.

Amazon’s stock has been under pressure due to concerns about slowing e-commerce growth and increased competition in the cloud computing market. However, the investor believes that Amazon’s long-term growth prospects remain strong, driven by the continued growth of e-commerce and cloud computing.

In its most recent quarter, Amazon’s revenue grew 13% year over year, and the company is profitable. Amazon is also investing heavily in new growth initiatives,such as artificial intelligence and healthcare.

Conclusion

while market downturns can be unsettling, thay also present opportunities for astute investors to acquire quality stocks at attractive prices. The five stocks discussed above represent compelling investment opportunities, and they are all still reasonably priced.

FAQ

What caused the market downturn?

President Trump’s imposition of worldwide tariffs.

What is a bear market?

A decline of 20% from a recent high.

Why is Nvidia considered a key technology company?

Its GPUs are the industry standard for AI.

What is Broadcom’s role in AI?

It is a critical provider of AI infrastructure.

What are the long-term growth drivers for Amazon?

Continued growth of e-commerce and cloud computing.