3 Beaten-Down AI Chip Stocks to Consider Buying in the Sell-Off

Chip stocks have taken a beating this week. A rotation out of high-flying technology names -- driven by mounting doubt about whether the industry's enormous spending on artificial intelligence (AI) will ever pay off -- has dragged the whole chip sector lower, and Friday brought more selling.

Sell-offs like this rarely bother to separate strong businesses from weak ones, which is exactly why they can create opportunities.

Three beaten-down chip stocks stand out as worth a look right now: Nvidia (NVDA 1.42%), ON Semiconductor (ON 23.66%), and Intel (INTC 3.20%). Each is down for its own reasons, and each comes with meaningful risk. But for investors who can stomach the volatility, the weakness may be a chance to buy quality at a discount.

Image source: Getty Images.

1. Nvidia

Start with the most obvious name. Nvidia stock has fallen about 18% from its 52-week high as of this writing, slipping back toward $190. Yet the business behind it has rarely looked better. In its fiscal first quarter of 2027 (the period ended April 26, 2026), revenue jumped 85% year over year to $81.6 billion, and data center revenue -- the heart of its AI business -- climbed 92% to $75.2 billion. And management guided for second-quarter revenue of $91 billion, a sign the growth isn't slowing yet.

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NASDAQ: NVDA

Nvidia

Today's Change

(-1.42%) $-2.77

Current Price

$192.97

Key Data Points

Market Cap

$4.7T

Day's Range

$191.22 - $195.54

52wk Range

$151.49 - $236.54

Volume

4.8M

Avg Vol

161.6M

Gross Margin

74.15%

Dividend Yield

0.14%

What makes the pullback interesting is the valuation. After the slide, Nvidia trades at about 29 times earnings -- well below the premium multiple it carried for most of the AI boom. For a company still growing this fast, with a gross margin near 75%, that isn't a demanding price.

Of course, the stock's risk is the one weighing on the whole sector: if AI spending cools, Nvidia's blistering growth could normalize quickly.

2. ON Semiconductor

ON Semiconductor didn't just get caught in the downdraft -- it got hammered, falling more than 23% on Friday, to around $91, as of this writing. The trigger was its own news: a $7 billion all-stock deal to buy Synaptics (SYNA 3.56%), its largest acquisition ever, meant to push deeper into edge AI and so-called physical AI (intelligence built into everyday devices).

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NASDAQ: ON

ON Semiconductor

Today's Change

(-23.66%) $-28.09

Current Price

$90.65

Key Data Points

Market Cap

$47B

Day's Range

$89.24 - $98.47

52wk Range

$44.56 - $134.92

Volume

44.2M

Avg Vol

11.6M

Gross Margin

36.66%

Because it's an all-stock deal, it dilutes current shareholders, and investors seemed to balk at the price and the integration risk.

Look past the one-day drop, though, and the underlying business is turning a corner. After a long slump in demand from automakers and industrial customers, onsemi's first-quarter revenue (for the period ended April 3, 2026) rose 5% year over year -- its first growth in several quarters -- while its AI data center business more than doubled.

"We exceeded expectations as demand strengthened through the quarter and we have moved beyond the cyclical trough on a path to recovery," CEO Hassane El-Khoury said in the company's first-quarter earnings release.

The stock trades at a price-to-earnings ratio in the 60s. But that figure says more about how depressed profits are at the bottom of the cycle than about a stretched valuation. If the recovery holds, today's price could look cheap.

3. Intel

Intel has been the sector's great turnaround story.

The stock has rocketed from a 52-week low near $19 to a high above $141 over the past year as new CEO Lip-Bu Tan's overhaul gained traction -- and this sell-off has only nicked it, with shares easing to around $128.

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NASDAQ: INTC

Intel

Today's Change

(-3.20%) $-4.25

Current Price

$128.62

Key Data Points

Market Cap

$668B

Day's Range

$125.52 - $131.20

52wk Range

$18.96 - $141.45

Volume

3.6M

Avg Vol

134.7M

Gross Margin

35.90%

And the business behind the run-up is improving: first-quarter revenue rose 7% to $13.6 billion, non-GAAP (adjusted) earnings per share came in at $0.29, and Intel reportedly landed Tesla as the first major customer for its most advanced 14A manufacturing process -- a marquee win for its struggling foundry business.

The catch is that Intel is still profitable only on a non-GAAP basis, and its foundry operation lost $2.4 billion in the quarter -- even as its revenue grew. Additionally, after a run this big, the stock already prices in a turnaround that is only partway done.

Of the three, it may be the most speculative -- a bet that Tan can keep the comeback going, not a cheap stock backed by proven profits.

The bottom line

Ultimately, none of these three stocks is low-risk, and the sell-off that dragged them down could have further to run if the market's doubts about AI spending deepen. But some carry more risk than others. Intel asks investors to trust a turnaround that is still unproven and still losing money where it matters most. And ON Semiconductor pairs a genuine cyclical recovery with a big, dilutive acquisition that has yet to prove its worth.

Nvidia, by contrast, looks like a fast-growing, dominant business whose shares have fallen below the intrinsic value of the underlying business. Sure, it's still a high-risk stock tied to the same AI cycle as the others. But of these three, it's the one I like most.