AI Stocks: Nvidia & Applied Digital Are a Buy Now After 2026 Pullback

The recent dip in AI-focused stocks, particularly reflected in the Global X Artificial Intelligence & Technology ETF (AIQ), might feel unsettling for investors. Down almost 9% year-to-date as of April 1st, 2026, it’s a stark contrast to the explosive growth we’ve seen in the sector over the past few years. But before hitting the panic button, consider this: pullbacks often present the most compelling buying opportunities. And for those of us in Austin, Texas – a city rapidly becoming a tech and innovation hub – this could be a particularly smart time to re-evaluate positions in companies like Nvidia and Applied Digital.

The narrative around AI has been incredibly strong, fueled by breakthroughs in generative AI and its expanding applications. From agriculture to healthcare, AI is no longer a futuristic concept; it’s actively reshaping industries. In fact, over 1.9 billion people are already using AI tools, a figure that’s only expected to climb. But market sentiment is a fickle thing. Concerns about geopolitical instability, expensive valuations, and the sheer cost of building out the necessary infrastructure have all contributed to the recent cooling. The question isn’t whether AI is a viable technology – the data suggests it absolutely is – but rather, are the current market valuations justified?

Morgan Stanley research indicates that companies embracing AI are experiencing an average productivity increase of 11.5% across sectors like transportation, healthcare, automotive, retail, and real estate. IDC estimates that for every dollar spent on AI services, $4.90 in value is generated. These aren’t just theoretical gains; they’re tangible improvements in efficiency and profitability. This suggests that the underlying fundamentals of AI remain strong, even if the stock market is taking a breather. Here in Austin, we’re seeing this firsthand. Companies like Dell Technologies, with a significant presence in the area, are heavily investing in AI-driven solutions, and the University of Texas at Austin is a leading research institution in the field.

Nvidia: Still the King of the Chipmakers

Nvidia, a key player in the AI revolution, reported a record $215.9 billion in revenue for its fiscal year 2026, a 73% increase. Their guidance for the current quarter projects a further 77% jump in revenue year-over-year. CEO Jensen Huang’s prediction of $1 trillion in sales for Blackwell and Vera Rubin chips through 2027 is a bold statement, but one backed by the relentless demand for AI processing power. Analysts are optimistic, with a median 12-month price target suggesting a potential 79% upside from current levels, assuming a price-to-earnings ratio in line with the Nasdaq-100. For Austin investors, Nvidia represents a compelling opportunity to capitalize on the continued growth of the AI hardware market.

View this post on Instagram

Applied Digital: Building the Infrastructure for AI

Applied Digital is quietly becoming a critical component of the AI ecosystem. They specialize in designing and constructing data centers specifically tailored for AI workloads. Having already secured $16 billion in 15-year lease contracts for two campuses in North Dakota, they’re poised for significant revenue growth. The company is actively exploring the construction of three additional data center campuses, adding another 900 megawatts of capacity. With 14 out of 14 analysts rating the stock a ‘buy’ and a potential 69% upside based on their median price target, Applied Digital presents a compelling case for investors seeking exposure to the infrastructure side of AI. The growth of Applied Digital is particularly relevant to Austin, as the city continues to attract data center investment due to its favorable business climate and skilled workforce.

It’s important to remember that investing in AI isn’t just about chasing the latest hype. It’s about identifying companies with strong fundamentals, sustainable growth prospects, and a clear competitive advantage. Nvidia and Applied Digital, while experiencing recent market pressure, fit that bill. The Global X Artificial Intelligence & Technology ETF (AIQ) provides a diversified way to gain exposure to the broader AI sector, but for those seeking more targeted growth, these two companies warrant serious consideration.

Navigating the AI Investment Landscape in Austin

Given my background in financial planning and wealth management, and recognizing the increasing interest in AI investments here in Austin, I often get asked about how to navigate this complex landscape. If this trend impacts you in the Austin area, here are three types of local professionals Try to consider consulting:

AI-Focused Investment Advisors: Look for advisors who specialize in technology and have a proven track record of understanding the nuances of the AI sector. They should be able to assess your risk tolerance and develop a personalized investment strategy that aligns with your financial goals. Specifically, seek advisors with experience in evaluating ETFs like AIQ and individual stocks like Nvidia and Applied Digital.
Tax Professionals with Tech Expertise: AI investments can have complex tax implications, particularly regarding capital gains and losses. A tax professional familiar with the tech industry can help you optimize your tax strategy and ensure you’re compliant with all relevant regulations. Look for CPAs who actively work with clients in the Austin tech community.
Cybersecurity Consultants: As you increase your exposure to technology, protecting your digital assets becomes paramount. A cybersecurity consultant can assess your vulnerabilities and implement measures to safeguard your financial information and investment accounts. Prioritize consultants with certifications like CISSP and experience working with high-net-worth individuals.

Ready to find trusted professionals? Browse our complete directory of top-rated financial advisors in the Austin area today.