The S&P 500 is starting to feel like it’s about to roll over again, even after a nice Thursday session of relief in response to some cooler CPI (consumer price index) data. Less inflation could grant the Federal Reserve a bit more flexibility to pursue further interest rate cuts in the new year, even though they’ve hinted that the cuts could be fewer and farther between. With Micron Technology (NASDAQ:MU | MU Price Prediction) also popping more than 10% in a day, it feels like there’s more of a tug-of-war going on in the tech and AI trades.
Undoubtedly, Micron’s strong results might not be enough to save the tech trade again, especially as the tech-heavy Nasdaq 100 continues to wobble over AI bubble concerns and hefty valuations across the tech sector.
The big AI spenders have been punished, and there might still be time to serve in the penalty box as Santa rally season comes and goes, perhaps with little in the way of upside momentum to get excited about. At this juncture, it seems like Santa won’t be delivering the gift of gains to investors, but perhaps the gift of lower valuations on a number of stocks that are already cheap-looking right here.
Arguably, the gift of market bargains seems like far more of a gift, especially for young investors who have money to put to work before the year comes to a close. If the AI-driven decline intensifies, there are a few names that might be worth a bit of a closer look. In this piece, we’ll look at three names to keep on your wishlist as we enter the prime of the holiday season.
Oracle
Oracle (NYSE:ORCL) has been described by some as the poster child for the AI bubble. And while it has been a painful decline (shares are currently down more than 45% from their peak) for the AI cloud infrastructure juggernaut amid what can only be described as an AI spending panic, I do think it’s a bad idea to bet against CTO Larry Ellison, especially as he transforms the company once again to capitalize on the next big tech trend.
Of course, there’s a lot at stake as Oracle leverages up to meet the AI compute demands of frontier AI innovators like OpenAI and Elon Musk’s xAI. And while the high debt load and capex-intensive strategy (more spending to come in 2026) might scare off many, I do think that Oracle is stepping in as a vital service provider at a time when AI firms can’t seem to satiate their hunger for compute. In a bear-case scenario, things could get pretty nasty for Oracle, especially if its top client, OpenAI, isn’t good for the money, and it has troubles paying off its debts as they come due.
Either way, I think there’s too much negativity in the stock. The company’s AI superclusters aren’t going to come cheap. But if you believe in Ellison and think AI isn’t in a bubble, Oracle stock could prove a steal right here at less than $180 per share.
Oracle is doing AI data centers differently from its hyperscaler rivals. And there’s a chance that its superclusters might just have distinct advantages that enable it to deliver on its high growth promises. So, despite the risks, Oracle looks compelling now that it’s taken a nearly 50% haircut. In my view, a lot of hype and froth has already been wiped off the name.
GE Vernova
GE Vernova (NYSE:GEV) has been extremely choppy in recent sessions as well, with the 15% mid-December spike now being given back. Undoubtedly, despite the painful recent move, shares of the turbine producer are still up over 88% on the year.
As the company looks to increase its skin in the AI power boom with its newly announced fuel cell manufacturing ambitions, I do think the name might be worth watching closely should a market plunge cause amplified losses in a stock that is showing signs of topping out. Undoubtedly, with all the AI data centers that are taking off, GE Vernova’s equipment is probably bound to keep flying off shelves just like AI chips.
At this juncture, perhaps investors are still underestimating the power needs of these new data centers coming up. And if that’s the case, GE Vernova stock might be worth every bit of its premium multiple. Further, I think the market isn’t appreciating the fuel cell news delivered at its Investor Day quite yet.
And if the AI data center spending pullback exhausts, look for shares of the industrial AI-exposed titan to get back to their winning ways again.
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