2 Stocks Down 34% and 40% to Buy Right Now

The first half of 2025 is drawing to a close, and investors have certainly experienced a rollercoaster ride of twists and turns. Despite significant sell-offs observed in the spring, the broader market indices, specifically the S&P 500 and the Nasdaq Composite, have demonstrated resilience, posting gains of approximately 2% and 1% respectively, as of this writing. This performance underscores a complex market environment where underlying strength coexists with periods of volatility.

While the headline indices show modest gains, a deeper dive reveals a more nuanced picture. Many individual stocks, even those with strong fundamentals and promising long-term outlooks, have faced considerable pressure. This divergence creates unique opportunities for discerning investors. When the market experiences broad-based corrections or sector-specific downturns, high-quality companies can become undervalued, presenting attractive entry points for those with a long-term investment horizon.

Advanced Micro Devices (AMD) is a prime example of a stock that has experienced significant volatility. Despite its pivotal role in the burgeoning artificial intelligence (AI) and high-performance computing (HPC) sectors, AMD's stock has seen considerable fluctuations. The company is a key player in the semiconductor industry, which is inherently cyclical but also driven by secular growth trends like AI, cloud computing, and gaming. AMD's strategic investments in its Instinct MI300X AI accelerator and its robust CPU and GPU product lines position it well for future growth, even if short-term market sentiment causes price dips.

For investors looking to capitalize on market dislocations, identifying companies with strong competitive advantages, solid balance sheets, and clear growth catalysts is crucial. A stock that has fallen 34% or 40% from its recent highs, especially if the underlying business fundamentals remain intact or have even improved, could represent a compelling 'buy the dip' opportunity. This strategy requires a thorough understanding of the company's intrinsic value rather than reacting solely to price movements.

Market Context and Implications The current market environment is characterized by ongoing macroeconomic uncertainties, including inflation concerns, interest rate expectations, and geopolitical tensions. These factors contribute to increased market volatility and can lead to indiscriminate selling. However, for companies like AMD, which operate in high-growth, innovation-driven sectors, these periods of market weakness can be temporary setbacks rather than fundamental impairments. The long-term demand for advanced computing power, driven by AI and data center expansion, remains robust.

Investment Insights When considering stocks that have experienced significant pullbacks, investors should perform diligent research. Key areas to analyze include:

• Valuation: Is the stock now trading at a more attractive valuation compared to its historical averages or industry peers?
• Growth Prospects: Are the company's long-term growth drivers still intact? Has anything fundamentally changed about its business model or market position?
• Financial Health: Does the company have a strong balance sheet, healthy cash flow, and manageable debt?
• Competitive Landscape: How does the company stack up against its competitors? Is it gaining or losing market share?
• Catalysts: Are there upcoming product launches, strategic partnerships, or market trends that could re-ignite investor interest?

For AMD, its continued innovation in AI chips, its expanding data center presence, and its strong competitive position against rivals like Nvidia and Intel serve as significant long-term catalysts. While short-term market sentiment can be fickle, the underlying technological trends supporting AMD's business are powerful and enduring.

Actionable Advice: Investors should consider dollar-cost averaging into positions during periods of market weakness. This strategy helps mitigate risk by spreading out purchases over time, reducing the impact of short-term price fluctuations. Furthermore, maintaining a diversified portfolio and aligning investments with one's risk tolerance and financial goals are paramount. The current market, despite its challenges, offers selective opportunities for those willing to look beyond the immediate headlines and focus on long-term value creation.