Trade Tariff: Two AI Stocks to Buy Right Now
These are two no-brainer AI stocks that investors can target amidst trade tariffs.
The tariff and trade war between the United States and China may have kicked off on a sober note but things are currently heating up, thanks to the broader impact on the stock market. The market is steadily turning away from various AI stocks that have performed well since 2023.
There are some AI stocks that continue to thrive in the face of growing tariffs. Here are two of them.
1. Taiwan Semiconductor Manufacturing
Trade tensions have clouded the technology sector's near-term outlook, but Taiwan Semiconductor Manufacturing (NYSE: TSM) could thrive, regardless of how things ultimately unfold. This leading semiconductor manufacturer captured a staggering 67% of global foundry revenue in Q4 2024. In other words, AI investments would likely need to slow dramatically everywhere for TSMC's business to stumble.
That doesn't seem likely, at least thus far. TSMC noted on its Q1 earnings call that its AI customers have not changed their behavior amid tariffs and reiterated expectations for mid-20% revenue growth this year. Barring a slowdown in broader semiconductor spending, analysts estimate TSMC will grow earnings by nearly 21% annually over the next three to five years.
Investors can look out for TSMC's risk due to its geopolitical exposure to China's tensions with Taiwan. The stock price might already reflect those risks, though. TSMC trades at a price-to-earnings (P/E) ratio of 21, a bargain for such a critical AI company with such high anticipated earnings growth. It could be a good idea to buy if you're comfortable with the geopolitical situation.
2. Amazon
Like many companies, tariff issues will likely present a near-term headache for Amazon (NASDAQ: AMZN). The e-commerce giant relies heavily on Chinese suppliers, and tariffs could raise prices to a point where consumers stop shopping. Assuming the U.S. and China eventually resolve their trade dispute, the tariff noise could be a distraction from Amazon's AI opportunity.
Tech companies are likely to face the brunt of the issues that come with trade wars, especially as it relates to cost of supplies and manufacturing. However, these two AI stocks have a strong resistance line that may take long to breach.
