#6 Broadcom Inc. (NASDAQ:AVGO)
Broadcom Inc. designs custom AI chips and networking gear, and many consider it undervalued because its earnings are growing much faster than its price suggests. Analysts expect earnings per share to rise about 71% in fiscal 2026 and about 66% in fiscal 2027, and revenue to rise about 66% and 64%. The forward PEG ratio is 0.53, against 1.17 for the sector.
Broadcom also has a software business that gives it steadier cash flow than a pure chip company. Jim Cramer has called the stock too cheap to ignore after its recent selloff, and Deutsche Bank says it trades well below its historical multiples. Read what Cramer said here. Some valuation models rate the stock expensive, and the forward P/E of 29 is about 6% above its own five-year average. That is the main risk. If growth slows, the multiple has little room to fall.
#5 Oracle Corporation (NYSE:ORCL)
Oracle Corporation sells database software and cloud infrastructure, and bulls say the market prices it like a slow software company while its cloud business grows like a young growth stock. Revenue is expected to rise about 34% in fiscal 2027 and about 46% in fiscal 2028, and earnings per share are expected to rise about 7% in fiscal 2027 and about 35% in fiscal 2028.
The stock trades at 15.9 times forward non-GAAP earnings, which is 28% below its own five-year average. Its forward PEG ratio is 0.52, against 1.17 for the sector. Bulls say Oracle’s large backlog of cloud contracts will turn into revenue over the next few years, and that the stock has not priced that in. The risks are heavy data center spending, negative free cash flow and rising debt. Oracle is down about 3% today and about 33% this year. Two billionaires were buying the stock while it slid. Read what they saw here.
#4 Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
A notable research site calls Taiwan Semiconductor Manufacturing Company Limited the world’s largest dedicated chip foundry and lists it among its best AI stocks in both April and October. Another finance site wrote on Oct. 12 that TSMC trades at 21 times forward earnings against 33 times trailing. It added that a PEG ratio of 0.89 suggests the stock could be undervalued.
That piece also said TSMC has lagged the chip rally because of margin worries, and that 20 of 21 analysts rate it a Buy. Other coverage pointed to a forward P/E of 25.3, below the 29.4 median for semiconductors, with 30% revenue growth expected in 2026. A popular investing site included TSMC in a January piece on undervalued AI stocks, and a second article called it still undervalued at 25 times forward earnings. Some writers warn that a pullback in AI demand would hurt the stock. Stanley Druckenmiller’s Duquesne Family Office owns TSMC. Check the full breakdown here.
