2 Beaten-Down AI Stocks to Buy Before the Next Bull Market

Microsoft and Broadcom are poised for growth as AI spending continues to rise.

Mar. 31, 2026 at 8:05am

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The artificial intelligence (AI) investment sector has seen significant declines, with many AI stocks down more than 20% from their all-time highs. However, the author believes that once geopolitical tensions stabilize and investors realize that AI spending will last for many more years, some of these stocks are slated to rocket higher. The author has his eye on two stocks in particular - Microsoft and Broadcom - which are down more than 30% and nearly 25% respectively from their all-time highs, but have bright long-term prospects.

Why it matters

The AI sector has been hit hard, but the author believes that Microsoft and Broadcom are well-positioned to benefit from the long-term growth in AI spending. As AI becomes increasingly integrated into various industries, these two companies could see significant gains once the market recognizes their potential.

The details

Microsoft's Azure cloud computing platform has seen impressive growth, with revenue rising 39% year-over-year in the second quarter of fiscal year 2026. The author believes that Microsoft's software is essential for businesses and that the cost of having this software fail is greater than the subscription fee. Broadcom, on the other hand, is seeing rapid growth in its custom AI chip business, which the company expects to generate $100 billion or greater revenue by the end of next year. The author believes that Broadcom's products are well-positioned to capture market share in the growing AI industry.

  • In the second quarter of fiscal year 2026, Azure's revenue rose 39% year over year.
  • In Q1 FY 2026 (ending Feb. 1), Broadcom's custom AI chip division saw its revenue increase 106% year over year to $8.4 billion.

The players

Microsoft

A multinational technology company that has expanded its footprint into generative AI and is a key host for many leading generative AI companies on its Azure cloud computing platform.

Broadcom

A semiconductor company that partners with AI hyperscalers to design custom AI chips specifically suited to their needs, which can cut down on costs and improve performance.

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The takeaway

The AI sector has seen significant declines, but the author believes that Microsoft and Broadcom are well-positioned to benefit from the long-term growth in AI spending. As these companies continue to innovate and expand their AI capabilities, they could see significant gains once the market recognizes their potential.