3 Artificial Intelligence (AI) Stocks That Look Like Great Buys Right Now

Tech stocks have fallen in recent days. Concerns that the war in Iran could last longer and that interest rates might rise further seem to be putting pressure on the overall stock market. Some stocks may continue to fall, but this could be a good time for investors to consider buying leading artificial intelligence (AI) stocks that may have fallen only temporarily.

Three stocks that could be worth buying after a price drop and have strong growth opportunities linked to AI are ASML Holding (ASML -0.73%), Taiwan Semiconductor Manufacturing (TSM +1.83%), and Broadcom (AVGO +0.16%).

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ASML Holding

ASML is a leading technology company that plays an important role in making computer chips. Its lithography machines print patterns onto thin silicon wafers, a key step in making advanced AI chips.

The company has been growing quickly because demand for chips is very high and businesses are investing heavily in AI. ASML has a strong competitive advantage. Because its technology is so important to AI, I think investors can justify paying a higher price for its shares. That is why it may still be a good long-term investment even at 40 times its earnings. Its forward price-to-earnings (P/E) ratio, which uses analysts' estimates of future earnings, is 29.

This year, the Dutch company expects to earn about 45 billion euros in revenue, around 38% more than last year.

ASML ASML

$1,635.17-$11.95 (-0.73%)

NASDAQ · As of 2:34 PM ET 10/20/26

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Key data points

Market capMarket cap is calculated using only publicly traded shares. It does not include shares that are private, unlisted, or part of dual-class structures that are not traded. The estimated market value may vary.$634.83B

Day's range$1,613.54 - $1,654.21

52wk range$946.11 - $1,999.96

Volume690K

Avg volume1.4M

Gross margin54.33%

Dividend yield0.55%

ASML's stock has fallen over the past month and is now 18% below its highest price in the past 52 weeks. For investors who plan to hold their shares for years, this may be a good time to buy more of this leading technology stock.

Taiwan Semiconductor

Another technology company with a strong competitive advantage and a key role in making chips is Taiwan Semiconductor. It controls about 70% of the market for companies that manufacture chips for other businesses. Its share is even larger in the market for advanced AI chips.

Although companies are trying to make chips on a large scale in the United States, doing so is unlikely to be easy or happen soon. Taiwan Semiconductor's expertise and low production costs make it likely to remain the market leader. That is why I think it is an obvious choice for any AI investor. In its latest results, covering the period through the end of September, revenue grew by 51% and earnings rose by 69%.

Taiwan Semiconductor's stock has fallen over the past month. Although it is still up 40% this year, it may be worth buying when its price drops. It is currently only 12% below its highest price. Its forward P/E ratio is 21, which makes its share price look reasonable given the company's strong business performance and potential for long-term growth.

Broadcom

Chipmaker Broadcom is another fast-growing company that AI investors may want to consider buying now. Its stock has fallen 3% this year and is 32% below its highest price in the past 52 weeks.

The company's business grew by an impressive 86% in its most recent reporting period, which ended on August 2. Demand for its custom-made AI chips has been extremely strong, and revenue from AI semiconductors rose by 221%.

The stock's high price compared with its earnings may have been one reason it struggled despite reporting strong results. Since then, its price has fallen, making its valuation more reasonable. The stock trades at more than 40 times its earnings over the past year, but its forward P/E ratio is only 19, in line with the average for the S&P 500 index.

Broadcom is well placed to benefit as businesses invest in AI and look for companies that can make custom chips. This helps businesses find other suppliers and lower costs instead of relying only on Nvidia chips, which are more general-purpose and often much more expensive.

I was cautious about Broadcom's stock in the past because its price was high compared with its earnings. Now, I think it looks like a much better buy.