Tech Stocks to Weather an AI Slowdown: Qualcomm, Dell, and More

Tech Stocks Poised to Weather an AI Slowdown

As artificial intelligence continues to captivate the market, investors are increasingly wary of a potential AI slowdown. Tech stocks with strong free cash flow, such as Qualcomm and Dell, are emerging as safe bets to endure market volatility. These companies are well-positioned due to their robust financial health and strategic focus on key sectors.

The concern over an AI bubble has led investors to seek companies with solid fundamentals. Free cash flow—the cash generated after operational and capital expenses—has become a critical metric for evaluating resilience in the tech sector.

Qualcomm’s Strategic Advantage

Qualcomm stands out for its “fabless” business model, which involves designing chips but outsourcing their manufacturing. This approach allows the company to maintain high free cash flow while staying at the forefront of AI device innovation. According to Ted Mortonson at Baird, Qualcomm’s technology is essential for powering AI devices at the edge, making it a key player in the AI ecosystem.

Dell’s Growth in AI Servers

Dell is another strong candidate for investors looking to hedge against an AI downturn. Bank of America analyst Wamsi Mohan highlights Dell’s potential for significant free cash flow growth, driven by increased profitability in AI servers and the expansion of its storage business. This growth is expected to bolster Dell’s position in the tech market, even if AI adoption slows.

Software Sector Opportunities

Beyond hardware, the software sector also offers promising opportunities for strong free cash flow. Atlassian, known for its developer collaboration tools, is expected to see a 13.7% annual growth in free cash flow, according to Truist Securities. This growth underscores the importance of software solutions in the AI landscape.

Salesforce’s Confidence in AI Adoption

Salesforce, despite recent stock sell-offs due to concerns about slow AI adoption, remains a strong contender. The company’s growing momentum with its Agentforce offering and plans to repurchase $7 billion in shares signal confidence in its financial health and future prospects.

Western Digital’s AI-Driven Gains

Storage and memory businesses like Western Digital have benefited significantly from the AI boom. Travis Prentice, CIO of the Informed Momentum Company, notes Western Digital’s increased pricing power, further solidifying its position in the market.

Top Performers in Free Cash Flow

The analysis identified several companies with high estimated free cash flow yields for 2026. These include PDD Holdings, GoDaddy, Akamai Technologies, ON Semiconductor, and Adobe. Other notable mentions are Cognizant, Gartner, First Solar, Dell, and GlobalFoundries.

Navigating the AI Landscape

Investors focusing on companies with growing free cash flow are better equipped to navigate market volatility. By prioritizing these fundamentals, they can make more informed decisions and weather potential slowdowns in the AI sector. This strategy ensures long-term stability and growth, even in uncertain times.