2 Top Artificial Intelligence (AI) Stocks to Buy on the Dip

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Considering the potential of artificial intelligence (AI), it might assist numerous investors in achieving or surpassing their retirement targets. Across various sectors, AI is driving innovation and enhancing labor efficiency at an unprecedented rate. According to PwC’s estimates, this could potentially boost the economy by trillions. With that in mind, here are two AI-focused stocks that might be worth considering during market dips.

1. C3.ai

Right now, Palantir Technologies is shining as a leader in artificial intelligence software. However, the potential of AI goes far beyond just one company. This becomes clear when you consider the rapid expansion of a smaller competitor in the same field – C3.ai.

Although C3.ai may not match Palantir in size or profitability, its impressive revenue growth could potentially drive up its stock price. In fact, C3.ai’s revenue increased by 26% compared to the same quarter last year, which is a significant improvement from almost no growth at all two years ago.

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Through its fresh alliance with Microsoft, C3.ai stands to gain a substantial boost in its sales team, enabling them to tap into a broader customer base globally. Notably, C3.ai’s offerings are compatible across all major cloud platforms. In the recent quarter alone, they sealed 59 deals via their partnership network.

Over the past year, the U.S. military has been integrating more advanced AI technology, which has positively impacted companies like C3.ai. In fact, C3.ai has signed 51 agreements with the federal government in this timeframe. Notably, the contract limit set by the U.S. Air Force Rapid Sustainment Office with C3.ai has been increased from an initial $100 million to a new maximum of $450 million.

These agreements underscore the competitive advantages of C3.ai’s AI solutions, particularly in areas such as prediction and forecasting that identify potential issues before they become major problems. In contrast, Palantir thrives when dealing with vast, disorganized data, transforming it into actionable insights to aid more informed decision-making. This diversity of strengths ensures that both companies can generate profits for their investors.

The potential for businesses to leverage AI for data analysis and decision-making, often referred to as the enterprise AI opportunity, is projected to grow into trillions over time. Specifically, C3.ai anticipates capturing a portion of this expansive market. According to market researcher McKinsey, the software and services sector of AI was worth $85 billion in 2022 and could expand to a range between $1.5 trillion and $4.6 trillion by 2040.

Last year, C3.ai’s stock peaked at $45, but it later dropped to its current price of $28. This decrease has caused its Price-to-Sales (P/S) ratio to lower to 9. Over the course of 2022 and beyond, the stock has fluctuated in its P/S multiple, ranging from a low of 4 up to 19.

The company’s stock is highly unpredictable, but experts on Yahoo Finance predict that its revenue will increase from $389 million in the fiscal year ending in April 2025 to approximately $551.2 million by the end of fiscal 2027. This potential growth might positively impact the stock’s value accordingly.

2. Marvell Technology

As an AI enthusiast, I’m excited about the role Marvell Technology (MRVL) is playing in the data center landscape. With the growing demand for specialized networking products and processors that can handle high-speed data transfer for AI training, MRVL is thriving. This robust growth in revenue at the start of the year is a testament to their strength.

While the stock has been on an upward trajectory over the past five years, reaching a peak of $127 at the beginning of 2025, it’s since pulled back to $73. However, I see this as a fantastic buying opportunity, given the prospects that lie ahead.

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In the first fiscal quarter, Marvell managed to set a new quarterly earnings record at an impressive $1.9 billion. This figure marks a 4% rise compared to the preceding quarter. More significantly, it represents a substantial 63% surge in revenue compared to the same period last year.

In the first quarter of their fiscal year, Marvell’s custom chip solutions boosted the company’s data center earnings by a substantial 76% compared to the same period last year. This growth could be further amplified by a lasting partnership with Amazon‘s Web Services, following Amazon’s recent investment in Marvell stock. Additionally, Marvel is teaming up with Nvidia‘s NVLink Fusion platform to optimize data centers for running artificial intelligence tasks more effectively.

Marvell’s NVLink chip integration will broaden the potential for data center business, a sector that the company initially projected at $75 billion. However, in June, the management revised their total market potential estimate to an impressive $94 billion by 2028. This projection encompasses various opportunities such as custom chips, network switching, interconnects, and data storage.

According to analysts on Yahoo! Finance, Marvell Technology’s revenue is projected to increase significantly, rising from approximately $5.7 billion in the fiscal year ending January 2026 to around $9.8 billion by the end of fiscal 2027.

Although the potential for growth is evident, the stock is currently priced at a 23-times price-to-earnings ratio and more than 10 times projected earnings for fiscal year 2030. For those seeking a hidden gem in AI stocks, it might be wise to mirror Amazon’s strategy and consider investing in some shares.

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2025-07-22 12:32