The AI trade is getting bumpy as investors question whether the massive spending on data centers and chips will generate sufficient returns. There is only so much capital companies can raise, and cracks are beginning to appear. Bonds issued by AI cloud provider CoreWeave have come under pressure, while shares of the company and other AI-related names, including Dell Technologies, Micron and Advanced Micro Devices, have suffered sharp declines amid concerns about rising borrowing costs and the sustainability of AI demand.
Yet some prominent investors believe the market is underestimating how much further the AI boom can run.
Speaking to CNBC earlier this week, Altimeter Capital founder and Chief Executive Brad Gerstner said investors have spent the past two years worrying about an eventual glut of AI computing capacity, only to miss substantial gains in semiconductor stocks. He believes the boom still has room to run because physical constraints, including chip production capacity and electricity supply, are limiting how quickly companies can expand AI infrastructure.
Gerstner is one of the loudest AI bulls on Wall Street, and his fund keeps buying AI stocks. Check his top 10 stock picks here. His latest filings show new additions too. Read his two new AI picks here.
“I actually think you have a natural constraint here,” Gerstner said on CNBC. “There’s only so fast in terms of production of wafers in this country. It’s only so fast that we can bring power on.”
HSBC’s Willem Sels also believes investors are underestimating the AI opportunity. In a September interview with Bloomberg Television, the bank’s global chief investment officer said US stock valuations did not fully reflect the potential for AI-driven productivity gains and earnings growth. He particularly highlighted semiconductor companies, whose valuations he believes reflect skepticism about future earnings forecasts despite the possibility of continued strong demand.
“The US is not expensive. The markets are questioning the sustainability of earnings growth, but that’s in the price because that gap has closed,” Sels told Bloomberg.
So, what are the best undervalued AI stocks to buy? We answered that question in an article titled “10 Best Stocks To Buy for High Returns“. You can find out what other media companies think below.
Methodology
We based our research on the most undervalued AI stock on at least 13 major finance sites to see what AI stocks they consider undervalued and analyzed the reasons they gave for their claims.
The ranking itself uses one measure: how many times a stock was called undervalued in the pieces we reviewed. The more often a stock came up, the higher it ranks. We counted each article once.
#10 Marvell Technology, Inc. (NASDAQ:MRVL)
Marvell Technology, Inc. designs custom AI chips and networking silicon for data centers. A notable research site says the stock trades 37% below its fair value estimate and expects the company to keep competing at the cutting edge against Broadcom and Nvidia. Other research from earlier this year argued that the market priced Marvell like a legacy connectivity company and ignored its custom AI chip business.
One community-driven valuation site puts fair value about 42% above the share price, and another site rates the stock a buy with about 44% upside to its target. Sites do not agree on how cheap it is. One piece noted a forward P/E of 51 after a 130% gain this year, and another flagged softer hyperscaler spending as the biggest threat. Marvell’s earnings calls have a history of moving the stock, and one of them looked like it could go badly. Check what management said to calm investors here.
#9 Amazon.com, Inc. (NASDAQ:AMZN)
Amazon.com, Inc. looks cheap to many because its cloud business is speeding up and the stock has pulled back. Analysts expect revenue to grow about 16% in 2026 and about 15% in 2027, and AWS is the main driver as companies move more spending to the cloud.
The stock trades at 31.6 times forward earnings, which is about 80% below its own five-year average. Bulls say heavy AI investment will pay off as AWS grows and the stock catches up. The main risk is that spending. Capital spending has pushed trailing free cash flow negative, and the stock still trades at about twice the sector’s forward multiple. Amazon is down about 4.6% today in the AI selloff.
Two well-known investors like the stock going into earnings. See the full earnings setup here.
#8 Alphabet Inc. (NASDAQ:GOOGL)
Alphabet Inc. gets called a classic tech bargain because it grows as fast as the other mega-cap tech stocks and costs much less. Revenue is expected to rise about 24% in 2026 and about 25% in 2027, and Google Cloud is the fastest-growing cloud business among the big players. The stock trades at about 16 times forward earnings on a GAAP basis, which is roughly 30% below its own five-year average and the cheapest multiple in the Magnificent Seven.
Bulls say the market prices Alphabet like a mature company and ignores how much AI adds to its cloud and search businesses. The risk is spending. Alphabet raised its 2026 AI spending outlook, and cloud growth could slow before that spending pays off. Analysts also expect earnings to stay about flat in 2027 after growing about 45% in 2026, and the forward PEG ratio of 1.63 is above the sector’s 1.25. Alphabet is down about 3% today. Claude’s AI portfolio picked Alphabet as its best performer this year. Find out what drove the gain here.
#7 Meta Platforms, Inc. (NASDAQ:META)
Meta Platforms, Inc. looks cheap to bulls because its revenue is growing fast while the stock trades at a multiple close to its own five-year average. Analysts expect revenue to rise about 28% in 2026 and about 21% in 2027, and earnings per share to rise about 16% in 2027 after a nearly flat 2026. The forward PEG ratio is 1.18, which is 22% below its five-year average and a little below the sector’s 1.25.
Bulls say the market focuses on the company’s AI spending and gives it little credit for the earnings that spending could produce. Bill Ackman’s Pershing Square opened a new stake in the stock and sees Meta’s valuation as lower than Alphabet’s, Apple’s and Nvidia’s. Read what Ackman’s fund saw in the stock here. The risks are spending and regulators. Heavy AI computing costs could weigh on margins, and European rules could hit them too. Meta fell about 7% today after its third-quarter results, which came in below estimates. Meta’s AI spending keeps climbing, and some big names still back the stock. Read why they stay bullish here.
#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.
#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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