#3 Microsoft Corporation (NASDAQ:MSFT)
Many consider Microsoft Corporation undervalued because they say the market is not paying enough for its long-term cash flow growth. Analysts expect earnings per share to rise about 14% in fiscal 2027 and about 20% in fiscal 2028, so growth is speeding up. Revenue is also expected to grow about 18% in fiscal 2027. The stock trades at 27 times forward earnings, which is 11% below its own five-year average. It has also gone almost nowhere over the past year, and bulls say that gap between the stock and its earnings will close as its AI spending turns into sales.
The risks are slower cloud growth if enterprise spending weakens and tougher competition from Amazon. The stock also still trades above the sector median on forward earnings, and its forward PEG ratio of 1.71 is above the sector’s 1.17. Investors keep asking whether its AI spending is paying off. Read the full answer here.
#2 Micron Technology, Inc. (NASDAQ:MU)
Many consider Micron Technology, Inc. undervalued because they say the market is pricing the stock for a fade that the numbers do not show. Micron makes the memory chips used in AI servers, and AI data centers now buy so much memory that profits have jumped. Analysts expect earnings per share to rise about 134% in fiscal 2027, and 28 of them raised their fiscal 2027 estimates in the past 30 days while 2 cut theirs.
The stock trades at 5.2 times forward earnings, which is 93% below its own five-year average. Its forward PEG ratio is 0.07, against 1.17 for the sector. Bulls say that a market-average multiple would deliver a big gain. The main risk is the memory cycle, since memory prices have swung hard in past booms. Memory stocks also slid again this month on worries about China’s ChangXin Memory Technologies. Micron was down about 6% Thursday in the AI selloff. See what Wall Street may be missing here.
#1 NVIDIA Corporation (NASDAQ:NVDA)
Our research shows the media believes NVIDIA Corporation is undervalued because its earnings are growing much faster than its share price. Analysts expect earnings per share to rise about 95% in fiscal 2027 and about 71% in fiscal 2028, and they keep raising those estimates. The stock trades at 23.8 times forward earnings, which is 43% below its own five-year average. Many websites also point to a PEG ratio of 0.48, against 1.17 for the sector. Nvidia’s lead in GPUs, its CUDA software platform and its networking business give it a moat that rivals will need years to cut into. NVDA was down recently, and two billionaires still like it. See who they are here.
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