2 Growth Stocks Down 27% or More to Buy Right Now

John Ballard, The Motley Fool

Wed, Apr 16, 2025, 2:37 AM 4 min read

Recent market volatility has raised anxiety for some investors, but these are the best opportunities to buy shares of the best growth stocks. The stocks of growing companies will continue to hit new highs over many years. You just have to maintain a cool attitude toward market swings and realize that the traders on Wall Street hitting the sell button on negative news are not investing for the long term.

Wall Street is sleeping on the following tech leaders. These stocks are trading well below their 52-week highs but are competitively positioned to deliver excellent returns for long-term investors.

1. Nvidia

Nvidia's (NASDAQ: NVDA) graphics processing units (GPUs) are widely used by artificial intelligence (AI) researchers and data center operators. With AI spending accelerating over the last few years, Nvidia has capitalized beautifully. Its innovation in the GPU market should continue to benefit long-term investors.

There's increasing competition for high-performance chips, but Nvidia's full-stack solutions, which include software support and networking products, make it a tough competitor, too. The number of researchers using Nvidia's CUDA and other software tools for improved GPU performance increased by 25% to 5.9 million last year.

Companies are racing to build the most advanced AI infrastructure. The growth in AI spending more than doubled Nvidia's data center revenue last year, and it ended the year with strong momentum. Leading cloud service providers drive about half of Nvidia's data center revenue. It's seeing growing demand from regional cloud hosting providers as companies prepare to launch more advanced AI reasoning models.

Agentic AI models that are able to reason and perform tasks without human input will require exponential increases in computing power. This is driving high demand for Nvidia's new Blackwell platform. Microsoft and Alphabet's Google were among the first to deploy Blackwell, which should fuel another year of strong growth for Nvidia.

Nvidia is still in the process of helping data centers transition from traditional computing systems to accelerated computing for AI workloads. CEO Jensen Huang has said this is a $1 trillion opportunity, making Nvidia's recent 27% sell-off from recent highs a great opportunity to start a position. The Wall Street consensus projects Nvidia's earnings to grow 37% on an annualized basis in the coming years.

2. ServiceNow

ServiceNow's (NYSE: NOW) workflow automation software is enabling the AI transformation for the world's largest corporations. More than 8,400 customers, including almost every Fortune 500 company, use ServiceNow. This software innovator benefits from recurring subscription revenue and high renewal rates, making the stock a great buy after the recent dip.

ServiceNow is estimated to control more than 40% of the global information technology software market. Several deep-pocketed competitors, including Microsoft, are vying for positions in this market, but they can't compete with ServiceNow's rapid deployment and integrations across leading cloud services.

Revenue has consistently grown above 20% year over year for the past five years. Subscription revenue grew 21% in constant currency last year. It's a very profitable business, with free cash flow increasing to $3.3 billion last year on nearly $11 billion of revenue.

Businesses are eager to adopt AI solutions to use with their data. ServiceNow's recent software releases are meeting this demand. More than 1,000 customers already use ServiceNow's latest agentic AI features through its Now Platform.

With the stock trading 34% below its previous highs, it's a great buy ahead of a massive growth opportunity. ServiceNow estimates its long-term addressable market at $500 billion. This explains why Wall Street analysts expect the company's earnings to grow at an annualized rate of 33% in the coming years.

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

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Microsoft, Nvidia, and ServiceNow. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

2 Growth Stocks Down 27% or More to Buy Right Now was originally published by The Motley Fool

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