While the stock market has been hot, especially stocks in the technology sector, there are still good bargains to be found in the tech space, even for investors with limited resources. Let’s look at three tech stocks that have shown both strong growth but also trade at attractive valuations.
If you have $3,000 available to invest that isn’t needed for monthly bills, an emergency fund, or to pay down short-term debt, these three stocks are great technology bargain buys to consider.
Nvidia (NASDAQ: NVDA) has been one of the best-performing stocks in the market over the past few years. Despite that, the stock is still attractively priced, trading at a forward price-to-earnings (P/E) ratio of about 31 based on next year’s analyst estimates (ending January 2026) and a price/earnings-to-growth ratio (PEG) just below 1. A PEG under 1 generally indicates a stock is undervalued, and growth stocks will often trade with PEGs well above 1.
In addition, Nvidia has also shown some of the strongest revenue growth among any size company over the past few years. It’s set to grow its revenue by triple-digit percentages for the second consecutive year in 2024 and saw its revenue soar by 94% year over year in Q3. Meanwhile, analysts expect the company to generate more than 50% revenue growth in 2025.
Nvidia’s growth stems from being the leader in graphic processing units (GPUs), which, due to their superior computing power, have become the backbone of artificial intelligence (AI) infrastructure. The company has an astounding 90% market share for GPUs, in large part due to its CUDA software platform. It initially created CUDA as a way for developers to program GPUs for different tasks, and since then, it has built out a platform of AI accelerators, libraries, and microservices specifically for AI.
Though demand for GPUs has soared, there is no indication of it slowing. AI models need exponentially more computing power to be trained, and numerous companies are spending huge sums on AI infrastructure. This includes its largest customer Microsoft, which plans to spend $80 billion on AI-powered data centers this year.
This continued demand — and Nvidia’s attractive valuation — make it a bargain buy.
Image source: Getty Images.
Taiwan Semiconductor Manufacturing(NYSE: TSM), or TSMC for short, is another company benefiting from the AI infrastructure buildout. Its stock also trades at an attractive valuation with a forward P/E of 23.5 times 2025 analyst estimates and a PEG of 0.33.
It is the leading semiconductor chip manufacturer in the world, making chips for the likes of Nvidia, Apple, Broadcom, and others. TSMC has managed to become the clear leader in advanced chips due to its scale and technological expertise. With rivals struggling in these areas, it has seen tremendous pricing power as well, which is leading to margin expansion. High margins mean more revenue flows to the bottom line as profit.
Last quarter, TSMC saw its revenue climb 37%, while its gross margins improved by 600 basis points year over year and 120 basis points sequentially to 59%. The company has once again increased prices for advanced chips in 2025, according to reports.
Given its pricing power and the continued growth of AI chips, TSCM looks like a bargain buy at current valuation levels.
While Nvidia and TSMC benefit from the AI infrastructure buildout, Alphabet(NASDAQ: GOOGL)(NASDAQ: GOOG) is one of the companies instituting a building out of data center infrastructure to help benefit its cloud computing unit Google Cloud. It’s also one of the cheapest mega-cap AI stocks, trading at a forward P/E of just over 19 times analysts’ 2025 estimates.
Last quarter, Google Cloud’s revenue jumped 35%, while the business segment saw its operating income soar from $266 million to $1.95 billion as it hit a profitability inflection point. The growth is being driven by customers looking to build out their own AI models and apps using Google Cloud’s infrastructure. Alphabet has also developed its own custom AI chip with the help of Broadcom, which it says has become a differentiator in helping lower costs and reduce AI inference processing times.
Outside of the cloud, Alphabet is the leading digital advertising platform in the world. It serves these ads through Google, the dominant search engine in the world, and YouTube, the world’s most-viewed video streaming service, as well as other properties. The company is also just beginning to bring AI to its search results and well as introducing a number of other AI-powered tools, such as text-to-image and text-to-video tools.
Overall, Alphabet saw its revenue climb 15% last quarter and its earnings per share (EPS) soar 37%.
In addition to its established businesses, Alphabet has a couple of intriguing emerging businesses. Its Waymo unit is the only paid robotaxi business operating in the U.S., offering rides in cities such as San Francisco, Los Angeles, Austin, and Phoenix. Meanwhile, the company just made a big breakthrough in quantum computing with its Willow chip. Quantum computing is still very much in the development stage, but the company has gone out to a nice lead in this emerging sector.
With a cheap valuation and a strong set of leading and emerging business segments, Alphabet looks like a solid bargain.
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia:if you invested $1,000 when we doubled down in 2009,you’d have $381,355!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,390!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $514,479!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
Learn more »
*Stock Advisor returns as of January 21, 2025
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Have $3,000? These 3 Stocks Could Be Bargain Buys for 2025 and Beyond was originally published by The Motley Fool
Leave a Reply