One Top AI Stock Down 37% That You'll Regret Not Buying on the Dip
It's earnings season again, and many stocks are tumbling following weak quarterly results. The S&P 500 has sustained most of its gains so far this year and remains up 7%.
The Federal Reserve is in a tight spot as it tries to combat inflation through raising interest rates while, at the same time, not suppressing the economy so much that it causes a recession. Many economic experts are predicting a recession at some point this year, and retail outfits are feeling the pinch of inflation and slower spending. That's been leading to slower growth for some, lower sales for others, and pressured profits for most.
It makes sense that share prices would come down as the market grapples with the latest set of earnings that don't support existing valuations. However, driven by fear, the market almost always overcorrects and drags down stock prices beyond what's warranted by the state of the underlying businesses. As a result, valuations often fall into dirt-cheap territory when share prices fall faster and further than underlying business metrics, including revenue and profits. This could lead to exciting opportunities for investing in companies that have incredible potential down the road.
Source Fool.com
