In this article, we will discuss the 13 Cheap AI Stocks to Buy According to Analysts.
As per Morgan Stanley, in 2025, technology companies are expected to maintain their focus on building AI platforms catering to their enterprise customers’ needs for optimized performance, profitability, and security. The companies have been partnering throughout the AI ecosystem of chip companies, hyperscalers, large language models, data, and software companies. At the same time, they have been tackling the unknowns of US trade policy and resource constraints.
AI Revolution- Biggest Tech Transformation
Wedbush analyst Daniel Ives has been constantly discussing the AI Revolution over the past few years. This is because he believes that this industry exhibits the biggest tech transformation in more than 40 years. As per Ives, the global AI market is projected to touch $407 billion by 2027 and $1.81 trillion by 2030, exhibiting a CAGR of 36%. Amidst such growth potential, several industries have been choosing AI in a bid to solve complex problems and optimize business processes through the use of advanced algorithms, ML, and data analysis techniques, added Daniel Ives.
Since the world generates ~400 terabytes of data on a daily basis, and 90% of the world’s data was generated over the previous 2 years, the analyst believes that several companies continue to look for ways to leverage their datasets to power AI initiatives. The focus is to generate witness operational efficiencies through the automation of repetitive tasks.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Factors Affecting the Growth of the AI Industry
FTI Consulting believes that AI-native companies, which have been developed around foundational and proprietary AI technologies, have seen strong investor interest, and this premium is expected to continue in 2025. Despite high-forward multiples, several AI companies demonstrated strong revenue growth and exhibited sustained earnings, which have kept pace with price. Moving forward, the firm believes that, in 2025, the stronger AI-native companies are expected to develop healthy ARR. The investors will look to balance portfolio risk through emphasizing investment in such companies possessing clear potential for mid-term revenue and profitability, as compared to companies having more long-term prospects.
FTI Consulting also opines that PE investment in AI or AI-influenced targets continues to rise. In 2025, the focus is expected to be on investments fueling significant cost efficiencies with relatively predictable AI applications. Also, the firm sees M&A activity in the broader AI sector to be strong in 2025.
Amidst such favourable investment trends, let’s take a look at the 13 Cheap AI Stocks to Buy According to Analysts.
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Our Methodology
To list the 13 Cheap AI Stocks to Buy According to Analysts, we sifted through several online rankings to shortlist companies that cater to the broader AI sector and the ones that trade at a forward P/E of less than ~15.0x. Finally, we chose the companies that analysts see upside to. The stocks are ranked in ascending order of their average upside potential, as of May 12. We also mentioned hedge fund sentiments around each stock, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
13 Cheap AI Stocks to Buy According to Analysts
13. Gen Digital Inc. (NASDAQ:GEN)
Number of Hedge Fund Holders: 40
Average Upside Potential: ~8%
Forward P/E as of May 12: ~11.6x
Gen Digital Inc. (NASDAQ:GEN), a cybersecurity firm, integrates AI into its products and services to improve digital safety and user protection. Analyst Tomer Zilberman from Bank of America Securities reiterated a “Buy” rating on the company’s stock with a price objective of $33.00. The company announced that it has successfully closed the acquisition of MoneyLion Inc. MoneyLion’s assets, such as its AI recommendation engine, together with Gen Digital Inc. (NASDAQ:GEN)’s growing customer base and ARPU, offer opportunities for efficiencies in customer acquisition. The company is anticipating leveraging the volume from both businesses to fuel margin improvements and make growth investments.
Gen Digital Inc. (NASDAQ:GEN) opines that there is a key need for smaller AI-driven anti-scam technologies capable of analyzing behavior in real time and stopping attacks before impacting consumers. Gen Digital Inc. (NASDAQ:GEN) has significantly enhanced its AI-driven threat detection capabilities by enhancing existing security engines and also creating new engines to enhance the protection leadership throughout additional channels, such as SMS, emails, or phone calls. The company highlighted that Northern Genie boosted its overall scam detection efficacy tenfold since its release. Notably, Genie happens to be a significant advancement when it comes to threat detection and defense, and has been tagged as a true AI-powered cyber safety companion. With cyber threats becoming increasingly sophisticated, the demand for Gen Digital Inc. (NASDAQ:GEN)’s advanced threat detection and prevention tools is expected to increase, aiding revenue growth.
12. Zoom Communications Inc. (NASDAQ:ZM)
Number of Hedge Fund Holders: 48
Average Upside Potential: ~9.3%
Forward P/E as of May 12: ~14.9x
Zoom Communications Inc. (NASDAQ:ZM) is engaged in providing an AI-first work platform for human connection. Analyst Sachin Mittal of DBS is optimistic about the company’s stock as a result of factors demonstrating the company’s growth potential and strategic positioning. The analyst noted the company’s investment in a unified communications platform. This consists of a variety of products like chat, phone, and video conferencing, exhibiting potential for long-term growth. Furthermore, the introduction of the AI Companion Add-On demonstrates a transition towards AI-driven revenue streams, which can reduce churn, and there can be seamless integration with enterprise workflows, added the analyst.
Zoom Communications Inc. (NASDAQ:ZM) highlighted that AI Companion has been evolving from a personal assistant to being truly agentic, signaling a strong leap forward in how AI can enhance productivity and collaboration. Overall, the growth in the broader AI industry will strengthen Zoom Communications Inc. (NASDAQ:ZM)’s growth prospects by improving its platform with features such as AI-powered meeting summaries, virtual agents, etc. The company’s AI-enhanced products continue to attract significant enterprise customers and enhance subscription value. With businesses adopting AI-enabled workflows, the company tends to benefit from global reach and increased demand.
Guinness Global Innovators, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Zoom Communications Inc. (NASDAQ:ZM) has struggled since coming out of the pandemic with changing consumer trends and a tougher macroeconomic environment. At purchase, Zoom looked attractive from a valuation perspective, having derated from its 2021 highs to near pre-pandemic levels – despite being a fundamentally better business. The company had built a strong brand, with ‘Zoom’ becoming synonymous with online conferencing and video calling after the company’s success during the pandemic, and the resulting paradigm shift towards increased hybrid working. What was once a more ‘speculative’ growth stock at the start of the pandemic, was now a slightly more mature growth company with high market share (underpinned by a best-in-class product), stickier revenues, and a stronger balance sheet with $5bn in cash creating room for growth investment. With a superior product and strong brand presence, growth expectations for the company were around mid to high single digits. However, since purchase, Zoom has returned -34% versus the MSCI World Index, which was up 28%, with a growth profile that has disappointed. The company’s key Enterprise segment has seen decelerating growth, with both customer growth and the net dollar expansion rate (Zoom’s revenue per user metric slowing significantly). Customer growth has slowed from a rate of 25% YoY in the quarter prior to purchase to an estimated 3.6% by the first quarter of 2024. Net Dollar Expansion rate has slowed even further, currently at 101% (1Q24) vs c.123% at purchase…” (Click here to read the full text)
11. Leidos Holdings, Inc. (NYSE:LDOS)
Number of Hedge Fund Holders: 51
Average Upside Potential: ~12.7%
Forward P/E as of May 12: ~14.5x
Leidos Holdings, Inc. (NYSE:LDOS) integrates AI into its core operations, mainly in defense, healthcare, intelligence, and cybersecurity. Truist upped the company’s price objective to $175 from $155, keeping a “Buy” rating on the company’s stock after its Q1 2025 earnings beat. The company posted non-GAAP diluted EPS of $2.97, reflecting 30% growth YoY. The company is committing $10 million to accelerate the use of AI for detecting and managing diseases, together with the University of Pittsburgh’s Computational Pathology and AI Center of Excellence (CPACE).
Leidos Holdings, Inc. (NYSE:LDOS)’s investment is focused on using the evolutionary power of AI to accelerate detection, diagnosis, and treatment of diseases impacting millions of people annually. Also, Protect AI is collaborating with Leidos Holdings, Inc. (NYSE:LDOS) to strengthen security for AI systems utilised by the US government agencies. Both companies focus on delivering full lifecycle security capabilities throughout the entire AI supply chain for national security, intelligence, defense, healthcare, and civil agencies, aligning with government standards and enabling secure AI innovation. Leidos Holdings, Inc. (NYSE:LDOS) and SeeTrue are partnering to boost the efficiency of airport security and customs screenings with the help of AI-enabled algorithms for detecting prohibited items.
10. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 79
Average Upside Potential: ~14.4%
Forward P/E as of May 12: ~12.4x
QUALCOMM Incorporated (NASDAQ:QCOM) is a critical player in the broader AI industry since it integrates and develops AI technologies throughout the core product lines, such as automotive, mobile, edge computing, and IoT. Bernstein analyst Stacy Rasgon maintained a “Buy” rating on the company’s stock, setting a price target of $185.00. The analyst’s rating is backed by a combination of factors demonstrating QUALCOMM Incorporated (NASDAQ:QCOM)’s recent performance and future prospects. As per the analyst, its Q2 2025 results were strong, with revenues and EPS exceeding market expectations, thanks to the strong performance in its QCT segment throughout sectors such as handsets, automotive, and IoT.
While there are worries related to the tariffs and macroeconomic uncertainties, the proactive approach of management and strategic buybacks exhibit confidence in QUALCOMM Incorporated (NASDAQ:QCOM)’s valuation, added Rasgon. During Q2 2025, the company returned $2.7 billion to stockholders, which includes $938 million, or $0.85 per share, of cash dividends and $1.7 billion of repurchases of 11 million shares. QUALCOMM Incorporated (NASDAQ:QCOM) established itself as a frontrunner in 5G technology and continues to invest significantly in AI capabilities, mainly for edge computing applications. Its emphasis on low-power, connected computing places it favourably to capitalize on the elevated demand trends for AI-enabled devices throughout various sectors. Overall, growth in the AI industry will drive growth for the company via increasing demand for its AI-optimized chips and platforms throughout edge devices, vehicles, and smartphones.
Mairs & Power, an investment advisor, released its Q1 2025 investor letter. Here is what the fund said:
“The Information Technology sector underweight had the largest relative impact on returns during the quarter. Only one of the Fund’s technology holdings posted a positive quarterly return – QUALCOMM Incorporated (NASDAQ:QCOM) – making this a somewhat hollow outperformance. Qualcomm is a “value tech” company which has enviable cash flows but we believe has been consistently underappreciated in the market for its technology licensing business, which has frequently been targeted for legal action by some of its major customers. However, we believe it continues to prove its best-in-class technology and, despite companies attempting to circumvent Qualcomm, we continue to see a long-term position in the wireless technology space for the company.”
9. Seagate Technology Holdings plc (NASDAQ:STX)
Number of Hedge Fund Holders: 52
Average Upside Potential: ~14.9%
Forward P/E as of May 12: ~10.9x
Seagate Technology Holdings plc (NASDAQ:STX) plays a critical role in the broader AI ecosystem as it provides data storage infrastructure, which remains a key element when it comes to training, managing, and deploying AI systems. Analyst Wamsi Mohan of Bank of America Securities reiterated a “Buy” rating on the company’s stock, raising the price objective to $120.00. The rating is backed by a combination of factors such as Seagate Technology Holdings plc (NASDAQ:STX)’s healthy financial performance and strong future prospects. Its revenue and EPS surpassed the expectations despite supply chain challenges. While revenue sat at $2.16 billion, its GAAP diluted EPS came in at $1.57.
The company, while quoting Goldman Sachs Research forecasts, highlighted that global power demand from data centres can increase by 165% by 2030 as compared with 2023. Seagate Technology Holdings plc (NASDAQ:STX) opines that AI is expected to lead the wave of demand for data storage. Furthermore, the increasing demand for mass capacity storage remains in line with the cloud CapEx investment cycle as well as the ongoing build-out of data center infrastructure to help AI transformations. The company’s emphasis on developing advanced storage technologies, such as HAMR, positions it well to capitalize on the opportunities available. Establishing as a critical provider of storage solutions for AI and cloud applications, Seagate Technology Holdings plc (NASDAQ:STX) can witness a robust and growing revenue stream moving forward.
8. NetApp, Inc. (NASDAQ:NTAP)
Number of Hedge Fund Holders: 41
Average Upside Potential: ~16.2%
Forward P/E as of May 12: ~12.6x
NetApp, Inc. (NASDAQ:NTAP) caters to the broader AI industry by its emphasis on offering data storage as well as management solutions, which are important for AI workloads. Loop Capital provided the price target of $130, keeping a “Buy” rating on the company’s shares. NetApp, Inc. (NASDAQ:NTAP)’s all-flash array annualized net revenue run rate amounted to $3.8 billion, reflecting an increase of 10% YoY. Loop Capital believes that the demand for AI-driven workloads has been accelerating. NetApp, Inc. (NASDAQ:NTAP) continues to see growth in demand for AI solutions, with the large market opportunity for enterprise GenAI beginning to open and customers seeking a unified and structured view of their data assets.
In Q3 2025, the company’s AI business managed to perform ahead of its expectations, evidenced by the fact that there were more than 100 AI infrastructure and data lake modernization wins. Overall, NetApp, Inc. (NASDAQ:NTAP) remains well-placed to capitalize on the opportunities provided by the AI industry as a result of its high-performance storage solutions and data management systems, which are tailored to the demands of AI workloads. During Q3 2025, NetApp, Inc. (NASDAQ:NTAP) delivered significant intelligent data infrastructure innovation as a result of the rollout of new all-flash NetApp™ AFF A-Series and C-Series systems. The company also enhanced StorageGRID™ object storage capabilities and expanded the cloud storage offerings.
7. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)
Number of Hedge Fund Holders: 46
Average Upside Potential: ~17.6%
Forward P/E as of May 12: ~13.6x
SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) integrates AI in its financial software and services in order to improve automation, operational efficiency, and decision-making for clients. Mayank Tandon from Needham reiterated a “Buy” rating on the company’s stock, with a price target of $90.00. The analyst’s optimism stems from expectations of increased organic growth in the latter half of the year, expansion of profit margins, and SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)’s effective capital allocation strategy. As the company begins to embed AI and quantum technologies into its products and services, it continues to see large-scale transformation across both financial services and healthcare.
SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) remains well-placed to capitalise on such trends. The demand for AI-driven automation remains high. The company rolled out its global governance-first AI platform at Blue Prism Live in London. The company introduced a unified trust layer, which can help regulate customers adopting advanced technologies with confidence, through the use of embedded guardrails and policy-based execution. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is also deploying 3,300 full-time equivalents since it launched this effort in early 2023.
It has introduced 20 new AI agents that can handle complex, unstructured content, such as vendor contracts and limited partner capital statements. With financial firms expanding their use of AI to enhance efficiency and gain insights from large data sets, SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is expected to benefit by providing integrated, enterprise-grade platforms.
6. HP Inc. (NYSE:HPQ)
Number of Hedge Fund Holders: 48
Average Upside Potential: ~18.4%
Forward P/E as of May 12: ~7.3x
HP Inc. (NYSE:HPQ) continues to position itself as a leading AI enabler, primarily in printing, personal computing, and workforce productivity, with the help of AI integration in products and services. Jim Hin Kwong Au, an analyst from DBS, remains optimistic about the company’s stock due to several factors, including HP Inc. (NYSE:HPQ)’s strategic transformation and market positioning. As per the analyst, the company remains well-placed to capture a significant market share with the rollout of its next-generation AI PCs, featuring advanced AI capabilities and superior compatibility. Furthermore, the collaboration with Microsoft’s “Copilot+” and the usage of AMD’s Ryzen AI chips can position HP Inc. (NYSE:HPQ)’s products apart and fuel growth in the AI PC market.
Elsewhere, Fitch Ratings believes that the company’s Personal Systems offers stable revenues with upside from secular trends, including increased AI requirements and video conferencing from hybrid work environment trends. An aging of the install base and Windows refresh cycle, which has been delayed as compared to the previous cycles, and HP Inc. (NYSE:HPQ)’s inventory investments can benefit FCF for H2 2025, added the firm. Overall, the growth in the AI industry will fuel demand for HP Inc. (NYSE:HPQ)’s AI-optimized PCs, printers, and workstations as businesses and consumers upgrade their respective hardware, which can support AI-powered applications.
5. NICE Ltd. (NASDAQ:NICE)
Number of Hedge Fund Holders: 28
Average Upside Potential: ~19.8%
Forward P/E as of May 12: ~13.4x
NICE Ltd. (NASDAQ:NICE) offers cloud platforms for AI-driven digital business solutions. The company integrates AI and ML in its core offerings, mainly customer experience, workforce optimization solutions, and contact center. William Blair analyst is bullish on the company’s stock. The analyst opines that NICE Ltd. (NASDAQ:NICE) remains well-positioned for future growth, primarily with the higher AI adoption in contact centers. The analyst believes that if the company can address operational issues, there can be a positive shift in the dynamics, improving cloud revenue growth. Furthermore, the potential for margin expansion with the help of operating expense leverage aids the positive outlook.
NICE Ltd. (NASDAQ:NICE)’s strong emphasis on AI integration throughout the product portfolio places it well for long-term growth and competitive differentiation. The increased AI attach rates across the large cloud deals exhibit that customers are seeing strong value in the company’s AI-enabled solutions. With AI continuing to evolve and mature, NICE Ltd. (NASDAQ:NICE)’s early investments can significantly pay off. Its AI capabilities can result in efficient and effective customer interactions and new revenue streams stemming from AI-driven services.
RS Investments, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“We initiated a position in NICE Ltd. (NASDAQ:NICE), a leading call center software provider, at a 7.5% free cash flow yield. The stock has been weak because of concerns that artificial intelligence (AI) will reduce the number of call center employees and that larger companies, including Microsoft and Salesforce, Inc., will leverage their AI strength to take market share. We believe both of these concerns are misplaced. If AI is successful in reducing headcount at call centers, it will provide massive value to NICE’s customers and NICE will be able to charge more for its software, creating a win-win situation. Additionally, although large competitors are very focused on AI, we think it is unlikely that NICE as the incumbent will be displaced. Call center jobs are repetitive and low technologically, so the key to winning is not who has the most powerful AI model, but instead who has the largest data pool of relevant data to train its AI model. NICE is competitively advantaged over any new entrant because it has the largest data repository of call center interactions. If NICE is successful in deploying AI within its customers, NICE’s revenue growth should accelerate, and we expect the market will pay a higher multiple.”
4. Akamai Technologies, Inc. (NASDAQ:AKAM)
Number of Hedge Fund Holders: 37
Average Upside Potential: ~26.6%
Forward P/E as of May 12: ~12.7x
Akamai Technologies, Inc. (NASDAQ:AKAM) is engaged in the provision of security, delivery, and cloud computing solutions. The company leverages AI and ML across key areas of its business, primarily in edge computing, cybersecurity, and content delivery. RBC Capital analyst Rishi Jaluria increased the company’s price objective to $80 from $75, keeping a “Sector Perform” rating. Given that the underlying business has been witnessing a shift, the firm is cautious on the near-term outlook. However, it also opines that the risk-reward on the company’s stock remains balanced. The advancement of AI provides numerous opportunities for the company to enhance service offerings and fuel growth. Notably, AI technologies remain in line with Akamai Technologies, Inc. (NASDAQ:AKAM)’s strengths in edge computing and distributed networks, positioning it well to capitalize on the trend.
The higher adoption of AI applications continues to fuel demand for edge computing resources. AI workloads tend to require low-latency processing close to the data source, which is what Akamai Technologies, Inc. (NASDAQ:AKAM)’s edge network offers. With companies implementing AI-driven solutions, the company is expected to see higher utilization of its Compute segment services. As AI becomes more relevant in enterprise applications, Akamai Technologies, Inc. (NASDAQ:AKAM)’s extensive network, as well as its enterprise customer base, offers a healthy foundation for offering AI-as-a-Service or specialized AI-optimized delivery solutions.
Also, AI technologies can be used to optimize the company’s core CDN services. Furthermore, AI can be used to enhance Akamai Technologies, Inc. (NASDAQ:AKAM)’s security offerings. ML algorithms have the ability to improve threat detection, automate response to security incidents, and provide sophisticated analysis of network traffic patterns. This can result in effective and efficient security solutions, fueling growth in the company’s security business.
3. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 63
Average Upside Potential: ~27.2%
Forward P/E as of May 12: ~10.3x
Dell Technologies Inc. (NYSE:DELL) remains a critical player in the AI industry as it is an AI infrastructure and solutions powerhouse, allowing companies to train, manage, and deploy AI systems at scale. The company highlighted that its prospects for AI remain robust, as it extends AI from the largest cloud service providers, into the enterprise at scale, and out to the edge with the PC. While announcing its results for FY 2025, Dell Technologies Inc. (NYSE:DELL) highlighted that the deals it has booked with xAI and others place its AI server backlog at ~$9 billion.
Erik Woodring, an analyst from Morgan Stanley, is optimistic about the company’s stock, backed by factors such as its strong position in the market. As per the analyst, Dell Technologies Inc. (NYSE:DELL)’s leadership in AI systems is projected to continue, with strong growth opportunities in AI servers. Furthermore, the company’s diversified customer base in AI servers, which includes several GPU clouds and infrastructure providers, is regarded as a critical strength aiding its long-term opportunities, added Woodring. With the acceleration of AI adoption, enterprises need a comprehensive suite of solutions. Thus, Dell Technologies Inc. (NYSE:DELL)’s capability to provide end-to-end solutions provides it with a strong advantage in capturing a significant share of AI-related spending.
2. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 66
Average Upside Potential: ~28.1%
Forward P/E as of May 12: ~9.4x
Hewlett Packard Enterprise Company (NYSE:HPE) remains a critical player in the broader AI landscape as it provides the platforms, infrastructure, and services required to create and deploy AI applications at scale. Meta Marshall from Morgan Stanley maintained a “Hold” rating on the company’s stock with a price objective of $14.00. The company booked $1.6 billion in new AI system orders in Q1 2025, resulting in the cumulative AI system orders of $8.3 billion. The Blackwell GPU generation of products accounted for ~70% of its new order intake during Q1 2025. Hewlett Packard Enterprise Company (NYSE:HPE) exited the quarter with $3.1 billion in AI systems backlog, reflecting a rise of 29% Q-o-Q.
On the revenue front, Hewlett Packard Enterprise Company (NYSE:HPE) saw $900 million in AI systems revenue during Q1 2025. Moving forward, the company anticipates significantly higher AI revenue conversion in H2 2025, thanks to the transition to Blackwell GPUs. The company has also exhibited optimism about the shipment of its first NVIDIA GV200 systems. Elsewhere, Hewlett Packard Enterprise Company (NYSE:HPE) saw momentum in the enterprise AI market. In Q1 2025, the company’s enterprise AI orders went up by 40% YoY, fueled by increased conversion from the proof of concept phase.
1. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 94
Average Upside Potential: ~40.2%
Forward P/E as of May 12: ~8.20x
Micron Technology, Inc. (NASDAQ:MU) is a leading contender in the AI industry as the company manufactures high-performance memory and storage solutions, like DRAM and NAND. These are important for running and training AI models across edge devices, data centers, and consumer electronics. Micron Technology, Inc. (NASDAQ:MU) has announced a market segment-based reorganization of its business units so that it can capitalize on the evolutionary growth fueled by AI, from data centers to edge devices. The 4 business units will be: Cloud Memory Business Unit (CMBU), Core Data Center Business Unit (CDBU), Mobile and Client Business Unit (MCBU), and Automotive and Embedded Business Unit (AEBU).
Micron Technology, Inc. (NASDAQ:MU) expects fiscal Q3 2025 revenue to be another record, fueled by shipment growth throughout both DRAM and NAND. The company expects a combination of AI data center demand and the ramp of HBM, and its associated trade ratio, will result in tightness at the leading edge and constrain the non-HBM DRAM supply. Talking about the Data Center, Micron Technology, Inc. (NASDAQ:MU) expects mid-single digit server unit growth in calendar 2025, while witnessing growth in traditional and AI servers. Since macro headwinds will not impact the core demand trends in data center infrastructure and AI-driven memory needs continue to accelerate, the company is well-placed to benefit from the secular tailwinds.
Delaware Funds by Macquarie, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:
“Micron Technology, Inc. (NASDAQ:MU) – Fundamentals here also appear solid though concern about global demand for handsets and PCs drove the shares down during the quarter. We expect Micron to be a significant beneficiary of growth in AI demand as investment in new data centers is extremely memory (semiconductor) intensive.”
While we acknowledge the potential of MU as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than MU but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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