Is Now the Time to Buy These 2 AI Stocks Down Over 40% from Their Peak?

In the dynamically evolving landscape of technology and artificial intelligence (AI), some stocks have recently faced significant declines. Amid these fluctuations, investors are keenly watching two notable AI-related stocks—Netweb Technologies and Anant Raj—which have plummeted over 40% from their peak values. This substantial drop raises questions about whether now is an opportune moment to add them to your watchlist or even consider purchasing.

Understanding the Market Context

1. Market Trends: The AI sector has experienced a remarkable rise in recent years, with stocks like Nvidia surging as AI adoption accelerates. However, events such as the emergence of DeepSeek, a Chinese start-up reportedly training AI models more cost-efficiently, have sparked market concerns over growth prospects[3].

2. Global AI Impact: AI is increasingly driving digital transformation globally. Companies that integrate AI into their operations are reaping benefits in terms of efficiency and innovation, making them attractive long-term investments.

3. Volatility in AI Stocks: Stocks related to AI, data centers, and supercomputing have faced volatility due to factors like valuation pressures and market sentiment shifts.

Netweb Technologies: The AI and Data Center Player

Netweb Technologies, a prominent player in high-performance computing and data analytics, has seen its stock price skyrocket before falling significantly. Here are some key points to consider about Netweb:

• Key Offerings:

• High-Performance Computing (HPC): Netweb is a leading provider of HPC solutions and has installed over 300 "Make-in-India" HPC systems.

• Data Analytics and Cloud Services: The company offers comprehensive cloud and virtualization services, crucial for businesses leveraging digital transformation.

• Market Performance:

• Rise and Fall: Netweb’s stock rose dramatically from ₹898 in July 2023 to ₹3,060 in December 2024, but then fell sharply.

• Current Status: Despite the decline, Netweb remains a significant player in AI-related hardware and data analytics services.

Anant Raj: From Real Estate to Data Centers and Cloud

Anant Raj, traditionally a real estate company, has recently made a strategic shift into data centers and cloud services. Here’s what’s notable about Anant Raj:

• Transformation Journey:

• Real Estate Background: Anant Raj started as a construction company but has transitioned into data centers and cloud services over the past few years.

• Growth Metrics: The company achieved impressive revenue growth with a CAGR of 78% and profit growth with a CAGR of 189% over the past four years.

• Data Center and Cloud Ambitions:

• Strategic Partnerships: Anant Raj has partnered with RailTel Corporation of India and Telecommunications Consultants India Limited to develop data centers.

• Capacity Expansion: Plans are underway to establish data centers with a capacity of 307 megawatts over the next four and a half years.

Why Investors Should Keep These Stocks on Their Radar

Despite the recent downturns, both Netweb and Anant Raj are positioned to benefit from long-term trends in AI and data center expansion. Here are some reasons why investors might want to keep them on their watchlist:

• AI and Data Center Trends:

• India is generating a significant portion of global data but lacks sufficient data centers, presenting a huge growth opportunity for companies like Anant Raj.

• Netweb Technologies' involvement in HPC and data analytics aligns well with the increasing demand for AI-driven data processing solutions.

• Financial Fundamentals:

• Anant Raj has shown significant financial improvements, with improved profit margins and debt management.

• Netweb’s strength in providing critical infrastructure for AI computing could sustain its market presence despite current volatility.

Market Advice: What to Consider Before Investing

Before adding Netweb Technologies and Anant Raj to your portfolio, consider these crucial factors:

• Valuation Risks: Both stocks have high valuations relative to their historical averages, which could pose risks if market sentiment shifts.

• Sectoral Uptrend: The underlying trend of AI adoption and data center demand remains strong, supporting the potential for long-term growth.

• Global Competition: Companies like Nvidia are dominating the AI hardware space globally, which could impact demand for Netweb's offerings.

Conclusion

Investing in AI-related stocks like Netweb Technologies and Anant Raj involves careful consideration of market trends, financial health, and industry positioning. Despite significant declines from their peak values, these stocks are worth monitoring due to their alignment with emerging trends in AI, data centers, and digital transformation. Whether now is the right time to invest depends on your risk tolerance and investment horizon. For those with a long-term perspective, these stocks could offer potential for growth once market conditions stabilize.

As AI continues to drive technological advancement, companies that adapt and innovate in this space are likely to attract investor attention. With India poised to become a significant hub for data center growth, companies like Anant Raj might benefit from early mover advantages. Conversely, technological innovations and competition from global leaders will continue to influence the trajectory of stocks like Netweb Technologies.

Ultimately, keeping these stocks on your watchlist could provide a strategic advantage in anticipating future market movements and potential rebound opportunities.