It has been pretty hard to ignore the incredible artificial intelligence (AI) rally that has occurred since April began: Numerous stocks in the sector are up big-time. If you missed out on that rebound from the year’s rocky start, it would be understandable to be disappointed. However, I don’t think investors need to panic if they weren’t on board. Several AI stocks still look like great bargains, including Meta Platforms (META +0.52%), Micron (MU 1.23%), and Nebius (NBIS 2.34%). I think investors can purchase them at these levels with expectations of strong multiyear returns.
Image source: Getty Images.
Meta Platforms
Meta Platforms is best known for the family of social media apps it owns: Facebook, Instagram, Messenger, WhatsApp, and Threads. These platforms generate a ton of money, primarily from advertising, with nearly all of Meta’s revenue coming from these sources. In the first quarter, Meta’s revenue rose by 33% — one of the fastest rates in big tech. Despite that, Meta’s stock isn’t valued at a very high level relative to its expected earnings.
META PE Ratio (Forward) data by YCharts
It trades for less than 19 times forward earnings — less than the S&P 500 (^GSPC +0.37%), which trades for 22.2. That’s a big discount on an established tech company that is known for producing solid results. I think Meta could see a strong rally throughout the end of 2026 to get back to at least market-average pricing, which would result in solid returns for investors.
Micron
Micron may feel like an odd inclusion on a list of stocks with more potential due to its massive recent rally. The stock has more than doubled since April began. However, Micron has a lot more room to run. It’s one of only a few large producers of high-end memory chips, and it’s thriving amid the current memory chip shortage. As a result of the shortage, all of the producers have pushed the prices of those components skyward, and Micron is making a fortune.
Today’s Change
(-1.23%) $-9.34
Current Price
$752.76
Key Data Points
Market Cap
$847B
Day’s Range
$747.20 – $780.16
52wk Range
$92.22 – $818.67
Volume
1.3M
Avg Vol
45.4M
Gross Margin
58.54%
Dividend Yield
0.07%
This year, Wall Street analysts expect Micron’s revenue to grow by 193%. For next year, they anticipate a still-impressive growth of 57%, bringing the top line to $173 billion. For comparison, Nvidia generated $216 billion in revenue last fiscal year and is a $5 trillion company. In that light, it’s clear why there could be more upside ahead for Micron if it continues to grow at this pace and the memory shortage persists. As a result, it’s still a solid stock to consider now.
Nebius
While Micron may be growing rapidly, it’s nothing compared to Nebius’ pace. The average analyst expects it to achieve 550% growth this year and 219% growth next year, with its revenue expected to rise around 20-fold from 2025 to 2027. This rapid growth all stems from its neocloud platform, which is tailored to run AI workloads.
Today’s Change
(-2.34%) $-5.15
Current Price
$214.78
Key Data Points
Market Cap
$54B
Day’s Range
$210.81 – $221.84
52wk Range
$34.72 – $233.73
Volume
324.8K
Avg Vol
17M
Gross Margin
7.48%
Nebius has announced major partnerships with companies like Meta Platforms, and has inked an agreement with Nvidia that allows it to obtain the GPU leader’s cutting-edge processors before other customers. This makes Nebius an excellent choice for organizations that need power to run AI workflows, and also makes it a strong investment. Even though the stock has doubled since April began, there is still a ton of room for it to run based on growth alone. Nebius is an exciting stock to watch, and if it can continue posting jaw-dropping results as it did in Q1 (its revenue growth was 684% year over year), it will be a long-term winner in the AI build-out.
Keithen Drury has positions in Meta Platforms, Nebius Group, and Nvidia. The Motley Fool has positions in and recommends Meta Platforms, Micron Technology, and Nvidia. The Motley Fool has a disclosure policy.
