The artificial intelligence (AI) revolution has hit a speed bump. On June 25, 2024, Goldman Sachs released a thought-provoking research report titled “Gen AI: Too Much Spend, Too Little Benefit?” This analysis sent ripples through the tech sector, causing many AI-centric stocks to stumble.

Goldman’s report paints a sobering picture of AI’s near-term economic impact. It suggests that building out AI infrastructure could cost a staggering $1 trillion. More concerningly, the report argues that AI’s cost-saving potential may not justify this enormous price tag. It also raises concerns about looming energy constraints potentially limiting AI’s ability to boost top-line growth outside the chipmaking industry.

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Investors, already jittery from a slowing economy and geopolitical tensions, seemed to take these arguments to heart. The result? A significant pullback in many of the market’s most prominent AI players.

A buying opportunity

While Goldman’s analysis raises valid points, I believe it may be overly focused on short-term hurdles. AI isn’t going to revolutionize the world overnight, but its transformative potential is undeniable. We’re witnessing the early stages of a technological shift that will reshape industries, boost productivity, and create entirely new business models.

Consider this: AI is currently in its infancy. The advances we’ll see in the next two to three years will likely make today’s AI look primitive by comparison. I’m convinced we’re on the cusp of seeing the emergence of true “killer apps” — AI-powered innovations that drive widespread adoption and showcase the technology’s game-changing capabilities.

Moreover, once AI becomes deeply integrated into popular ecosystems like Apple‘s, we’ll likely see a quantum leap in public awareness and appreciation of AI’s potential. This near-term event could trigger a new wave of investment and innovation across the tech sector.

With this long-term perspective in mind, I see the current dip in AI stocks as a compelling buying opportunity for patient investors. Two companies in particular stand out as attractive options for investors looking to capitalize on the AI revolution: Nvidia (NASDAQ: NVDA) and Amazon (NASDAQ: AMZN). Here’s why.

Nvidia: The AI Powerhouse

Nvidia, the chipmaker at the heart of the AI boom, has seen its share price drop by nearly 15% since Goldman’s report. This double-digit pullback presents an intriguing entry point for a company that’s absolutely dominating the AI chip market.

Nvidia’s graphics processing units (GPUs) have become the de facto standard for AI processing, powering everything from autonomous vehicles to large language models. The company’s recent financial results underscore this fact. In fiscal 2024, Nvidia reported a staggering 126% year-over-year jump in revenue and an equally impressive gross margin of 73%.

What excites me most about Nvidia, though, is its relentless innovation. Its next AI GPU, Blackwell, showcases the company’s commitment to pushing the boundaries of this game-changing tech. Given its outsize market share and focus on innovation, Nvidia is in a prime position to benefit from an AI-powered future.

Amazon: AI woven into its DNA

E-commerce and cloud computing giant Amazon has also felt the impact of Goldman’s report, with its stock shedding 10% of its value. However, I see this as a chance to invest in a company that’s integrating AI across its vast business empire.

Amazon’s AI strategy is multifaceted. In e-commerce, AI powers everything from product recommendations to inventory management and logistics optimization. Amazon Web Services (AWS) offers a comprehensive suite of AI and machine learning tools, enabling businesses of all sizes to harness the power of AI.

While Amazon’s recent growth hasn’t been as explosive as Nvidia’s, it’s still noteworthy. Wall Street is expecting a 22% rise in sales over the course of 2024 and 2025 for the e-commerce titan. Consistent double-digit revenue growth is an impressive achievement, especially for a megacap company like Amazon.

The bottom line is that Amazon’s massive data resources and cloud infrastructure give it a significant edge in developing and deploying AI solutions at scale.

Playing the long game

The current market skepticism around AI, as reflected in Goldman’s report, may be overlooking the technology’s long-term transformative potential. Both Nvidia and Amazon are exceptionally well positioned to benefit from the ongoing AI revolution, regardless of short-term cost concerns or economic headwinds.

Nvidia’s innovation engine and market dominance in AI chips make it a cornerstone of the AI ecosystem. Amazon’s diverse AI strategy, spanning e-commerce, cloud services, and consumer devices, provides multiple avenues for growth and value creation. So, despite the ongoing volatility in these names, I plan to start buying them aggressively over the next two years.

However, if you want exposure to this theme without buying individual stocks, there are several exchange-traded funds (ETFs) available that focus on AI and machine learning. Most of these ETFs own a significant number of Nvidia and Amazon shares.

Should you invest $1,000 in Nvidia right now?

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