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Despite a recent pullback in the tech sector, valuations for most AI stocks remain high.
The AI frenzy has resulted in double-digit gains for multiple chip stocks this year, with NVIDIA (NVDA) even seeing a triple-digit jump in its share price year-to-date. Investor enthusiasm has also stoked shares of Big Tech companies that have been investing heavily in AI, such as Microsoft (MSFT), Amazon (NASDAQ:AMZN), Alphabet (GOOG) and Meta Platforms (NASDAQ:META).
Which brings us to our SA investor question of the day: Which AI stocks are undervalued right now?
We asked SA analysts Ahan Vashi and Victor Dergunov to weigh in on the topic.
Ahan Vashi: Artificial Intelligence has been the red-hot theme in the stock market since late 2022, and valuations for obvious winners have certainly gotten frothy. However, among the big tech bunch, Amazon (AMZN) and Meta Platforms (META) are slightly undervalued. Also, AI Infrastructure CAPEX spending is showing no signs of slowing, and in that space, Super Micro Computer (NASDAQ:SMCI) is looking attractive in the low-$700s.
For long-term investors, data and software giants such as Snowflake (NYSE:SNOW) and Salesforce (NYSE:CRM) are enticing prospects, as the AI revolution will likely move from hardware to software in the next 2 to 3 years.
Victor Dergunov: We’ve seen considerable pullbacks and corrections in many high-quality AI-related stocks. Many companies look attractive from a future earnings potential/current valuation perspective. Several of my favorite undervalued AI stocks here include Advanced Micro Devices (NASDAQ:AMD), Broadcom (NASDAQ:AVGO), Micron (NASDAQ:MU), Dell (NYSE:DELL) and Tesla (NASDAQ:TSLA).
More on Advanced Micro Devices, Amazon, etc.
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