4 Top Growth Stocks: AI Fear Creates Opportunity

As you can see in the 10-day return column, Artificial Intelligence (“AI”) stocks have been particularly volatile. Much of this volatility is fear-driven and has thereby created select attractive opportunities, as the AI megatrend is still fully intact (i.e. it’s in its early innings). In this report, I share 4 top AI growth stocks for you to consider, especially following the recent fear-driven selloff (i.e. “buy lower” opportunities).

The AI Megatrend

Before getting into the 4 top stocks, it’s worth first reviewing the AI megatrend. In particular, it’s important to realize that just because the megatrend is in its early innings, that doesn’t mean all AI stocks will be successful.

Take for example, the Internet megatrend at the start of this century; many stocks were overhyped, overvalued, share prices eventually crashed, and it took many years for a lot of investors to recover (see graph below).

There were ultimately big Internet winners (such as Google, Meta and even Netflix), but there were a lot of big losers that never recovered too.

Recent AI Volatility:

Fast forward to the AI megatrend of today. There will be big winners and losers, and the market’s volatility over the last few weeks has created some additional margin of safety for would-be buyers, especially as the AI megatrend beings to shift from phase 1 (capital expenditures) to phase two (software implementation and related infrastructure demands—such as astronomical datacenter energy requirements).

*Honorable Mention:
Palantir (PLTR)

Palantir is a truly impressive AI software company, Palantir (and my “honorable mention” in this report).

Palantir’s business has been growing like wildfire, and it has enormous amounts of continuing growth ahead. Plus, the shares have just recently sold off hard, thereby creating a more attractive price for potential buyers.

The problem with Palantir, however, is not it’s business (business is great!), it’s Palantir’s valuation. Much like the earlier green-red-and-blue graph of “Dot Com Darlings,” Palantir is so loved by many investors that its valuation has already reached incredible levels. For example, it’s recent price-to-sales ratio is over 75x (dramatically higher than just about every other opportunity in the table).

I have a high degree of confidence CEO, Alex Karp, will lead this business through incredible growth over the next decade (as the AI megatrend continues to unfold). However, I recently sold 100% of my Palantir shares at $101.00 per share (my average purchase price was in the $20’s) because it was being valued like the next 10 years already happened. I’ll look to add back shares of Palantir in the future (they’re already trading at a much more attractive price following recent market volatility, and we may get a shot in the coming months to buy back even lower).

Snowflake (SNOW)

Snowflake is a cloud-based, big-data (structured and unstructured), AI company with incredible revenue growth and a truly massive total addressable market size/opportunity. The company’s platform allows businesses to consolidate disparate data into a single source to derive insights, build data-driven applications, and share securely with other teams and even other companies (impressive!). It also integrates with the big cloud platforms, including Amazon Web Services, Microsoft Azure, and Google Cloud (this is a big deal).

And Snowflake’s latest quarterly earnings announcement (released this past week) was also impressive. For example, revenue was $986.8 million (ahead of a $957 million estimate) and represented 28% year-over-year growth. Also impressive, the company’s net revenue retention rate was 126% (land-and-expand).

From a valuation standpoint, Snowflake is one of the more expensive names on the list, but this is to be expected as it is younger and it is turning the corner to more profitability. Additionally, its price-to-sales ratio has come down dramatically since the heights of the pandemic bubble, and the company’s relatively new CEO appears to be pivoting and accelerating the company in the right direction.

Given the truly massive AI market opportunities ahead, Snowflake presents an attractive long-term growth opportunity.

*(long Snowflake).

Constellation Energy (CEG)

Constellation Energy is the largest producer of carbon-free energy in the US, and it is positioned to benefit dramatically from the growing energy demands of AI datacenters. Specifically, CEG is focused on generating and supplying clean power through its extensive fleet of nuclear plants (along with hydro, wind, and solar facilities).

It serves a wide range of customers, including businesses, homes, and public sector entities, while also providing energy products and services tailored to meet the growing electricity demands of industries like AI and data centers.

The company surpassed expectation in its latest earnings release, and also increased its dividend by 25% (an indication of strength, especially for a utility sector stock). CEG’s 5-year earnings per share growth estimate is impressive (15%), especially considering the relatively low-beta nature of the utility sector combined with CEG’s ongoing benefits from big AI data center energy demand. This one has a lot of impressive upside potential in the years ahead.

Salesforce (CRM)

Salesforce is the leading cloud-based, customer relationship management (CRM) software, and it’s set to benefit from AI (particularly, “Agentforce,” Salesforce’s suite of autonomous AI agents).

Unlike some of the more aggressive AI growth stocks on this list, Salesforce is emerging as a “growth at a reasonable price” or “GARP” stock, considering the steady double-digit revenue growth combined with the compelling valuation, especially as the share price has pulled back recently. Trading at 1.7x sales, with 16% net margins and a 17.4% 5-year expected EPS growth rate, the Salesforce shares are compelling.

While the company’s fiscal 2026 revenue guidance ($40.5 billion to $40.9 billion) falls short (of the $41.46 billion expected by the street), Salesforce’s 34% operating margin forecast and steady profitability signal strength and attractiveness as a compelling GARP play (especially considering the company boosted its share repurchase program, thereby complementing its sturdy cash flow generation).

*(long Salesforce).

More Top AI Growth Stocks

Please note, the 4 stocks listed above are ranked as an “honorable mention” and then #10, #9 and #8 in my new report: “Top 10 Growth Stocks (AI Fear Creates Opportunity).” And you can access a few more of the top ideas here.

The Bottom Line

Just because shares have sold off in recent weeks, the AI megatrend is not over. In fact, it is still in its early innings and the recent share price pullback creates some additional margin of safety for long-term growth investors to buy.

The names highlighted in this report are particularly interesting, and hopefully provide some timely ideas worth considering as you manage your own investment portfolio.

And remember, near-term price volatility is often the price you pay for the best long-term returns. Long-term compound growth remains the 8th wonder of the world. And disciplined, goal-focused, long-term investing remains a winning strategy.