Stock Market Sell-Off: 2 Safe AI Stocks to Buy Amid Tariff Turmoil, According to a Wall Street Analyst

Group 1: Market Overview - The S&P 500 experienced a rapid decline from a record high into correction territory in just 22 days, significantly shorter than the historical average of 75 days, indicating high economic uncertainty due to changes in U.S. trade policy under President Trump [1] Group 2: Investment Opportunities - Cloud and software stocks, such as Alphabet and CrowdStrike, are considered safer investments during the ongoing trade war, as they primarily sell services not subject to tariffs [2] - Alphabet's revenue rose 12% to $90 billion in Q1, driven by strong sales growth in cloud services, with GAAP earnings increasing 49$2.81 per diluted share [5] - CrowdStrike is recognized as a leader in cybersecurity, particularly in endpoint security, and has a strong presence in cloud security and identity protection [8][10] Group 3: Company Insights - Alphabet - Alphabet's digital advertising and cloud services are key growth engines, with its search advertising market share expected to increase due to advancements in generative AI [4] - The company is the third largest public cloud provider, capturing 12% of infrastructure and platform services spending in Q4 2024, up from 11% in Q4 2023 [4] - Analysts expect Alphabet's earnings to grow at 7% annually through 2026, but actual growth in ad tech and cloud spending is forecasted at 14% and 20% annually, respectively, through 2030 [6] Group 4: Company Insights - CrowdStrike - CrowdStrike's platform consolidates 30 software modules and is a leader in managed detection and response, addressing a significant demand for cybersecurity professionals [9] - The company has a competitive advantage due to its extensive data, which enhances the effectiveness of its AI models in preventing attacks [10] - Despite disappointing guidance indicating a 14% decline in earnings for the current fiscal year, management expects returns on investments in marketing and AI product development to drive growth next year [11] Group 5: Valuation Considerations - CrowdStrike shares currently trade at 27 times sales, above the three-year average of 21 times sales, indicating a premium valuation [12] - Investors with a long-term horizon may consider a small position in CrowdStrike, but it may be prudent to wait for a more favorable price [12]