3 Artificial Intelligence (AI) Stocks Still Too Cheap to Neglect

If you missed it, tech stocks gathered again.

After reaching an all-time high in December, Nasdaq Composite Materials In January, indexing made breakthroughs in training and reasoning efficiency, causing the Artificial Intelligence (AI) universe to overturn January’s indexing. By late February, many feared that President Donald Trump's tariffs could be severely hit. Sold out accelerated in April after Trump's announcement of global tariffs, and it turned out to be worse than investors feared.

In the weeks since, Nasdaq recovered about half of its peak-to-valley losses. As of this writing, the tech index is only above 12% from its December high. But there are still many opportunities in the market. These are three AI stocks, which are still too cheap to ignore.

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Amazon (NASDAQ: AMZN) Operate a leading cloud computing platform in the world. Its Amazon Web Services (AWS) segment generated $29.3 billion last quarter, up 17% year-on-year. Although this growth rate is slower than the main competitors, there are several things worth pointing out. First, AWS is significantly greater than those competitors. Secondly, it maintains capacity limitations.

Management is expected to bring more AWS capacity in the second half of the year. The company plans to plan more than $100 billion in capital expenditure in 2025, most of which will be used to improve AWS's capabilities. It also makes a lot of investments in AI’s custom silicon solutions (Trainium and pefleentia machine learning chips). CEO Andy Jassy said Amazon is strongly adopting its train instance.

However, not all of this spending is strengthening its data centers to support increased use of AI. Amazon also continues to use it to improve its logistics network. After rapidly expanding its footprint in 2020 and 2021, Amazon overhauled its logistics system in the past few years to improve network efficiency. The results were great: shipping costs increased by only 3% in the last quarter, while paid units increased by 8%.

Amazon has been in good shape for a long time. Its crown as the champion of e-commerce is everywhere. Although tariffs may affect its retail business, it will not be affected by the only retailer. The strong expansion it has achieved over the past two years puts it in a higher position to absorb higher costs and reduce demand. At the same time, it remains an essential platform for developers and is a leading resource for AI tools and services through AWS.

Investors can currently buy stocks at relatively low valuations. Its enterprise value is less than 3 times the 2025 sales estimate. This is about 10% lower than its long-term average.

Lin Research (NASDAQ: LRCX) is one of the top manufacturers of semiconductor manufacturing equipment – ​​all high-end AI chips entering the data center pass through its machines at all stages of its construction.

Lin has special advantages in memory chip equipment. In the first quarter, 43% of its revenue came from memory chip manufacturers, which has seen a significant increase in the past few years due to advances in AI chips. In order to obtain peak performance from state-of-the-art graphics processing units (GPUs), they must be deployed in systems with high bandwidth memory chips. Memory is often a bottleneck in training large language models (LLMs), and as these models become larger, the demand for memory chips has grown significantly.

However, Lin also benefits from the demand for general equipment for silicon chip production. As foundries make substantial investments in expanding their capabilities to meet rising demand for chip designers, Lam is selling more equipment and offering more contracts for the equipment. Last quarter, its revenue grew 24%, and despite uncertainty caused by tariffs, management expects growth to accelerate in the second quarter. It also expects its operating margin to expand as it exploits fixed costs.

In the long run, LAM benefits from a benign cycle. As a leading equipment provider for chip manufacturers, it generates more revenue and can invest in R&D. This allows it to expand its technological leadership and win more contracts. As a result, management expects to increase its market share in the wafer manufacturing equipment space over time, exceeding the growth of the semiconductor industry.

Lin's stock fell from its 2024 high. Now, the stock is trading at just 19 times the forward earnings. As management expects a double-digit increase in revenue percentage over the next four years, investors should be happy to pay that price for the stock.

Meta Platform (Nasdaq: RMB) It is the company behind Facebook and Instagram, which makes some technology departments the biggest bet on artificial intelligence. In its first-quarter earnings report, management announced that it had raised its capital expenditure plan for this year to $64 billion to $72 billion, which is between $60 billion and $65 billion from previous capital expenditure plans. Although other companies spend more, they also rent some computing infrastructure.

However, the investment seems worth it. Meta saw strong participation growth, thus creating more advertising impressions on its platform. Most importantly, its average advertising price continued to rise, with revenues rising 16% in the previous quarter. The result stands out among other social media advertising companies that have recently worked to replicate the success of Meta.

But AI offers more opportunities for Meta. AI-driven marketing tools can help advertisers design and test new campaigns. CEO Mark Zuckerberg ended up thinking Meta's AI was an agent for the enterprise, grasping the client's goals and budgets, and then creating the entire event for them. AI agents can also play a key role in customer service and sales through Meta's messaging applications, WhatsApp and Messenger. This could end up being an important revenue stream considering the large user base of these apps.

The Meta has also been proven to be a cash machine. Even if billions of dollars are plunged into AI and Metaverse development, the company has produced $10 billion or more of free cash flow for eight consecutive quarters. This provides a huge advantage in its ability to continue investing in technology development that can provide it with additional growth opportunities.

Although its stock price has recovered from the 2025 slideshow - this rebound continues after its first-quarter earnings release, trading in the dollar stock still requires only 23x forward earnings estimates. Given its potential double-digit percentage earnings growth and its huge competitive advantage in the industry, Meta's stock is too cheap to ignore at this price.

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John Mackey, former CEO of Amazon's subsidiary Whole Foods Market, is a member of the board of directors of Motley Fool. Randi Zuckerberg is a sister of former marketing development director, Facebook spokesperson, and Meta Platform CEO Mark Zuckerberg, and a member of the Motley Fools’ board of directors. Adam Levy has positions on Amazon and metaplatforms. Motley Fool has a location and recommends Amazon, LAM Research and Metaplatforms. Motley Fool has a disclosure policy.

Nasdaq Recovery: 3 Artificial Intelligence (AI) Stock Still Too Cheap to Neglect, Originally published by Motley Fool