Nasdaq Recovery: 3 Artificial Intelligence (AI) Stocks That Are Still Too Cheap to Ignore

The Nasdaq Composite has clawed back from its early-2025 lows, but pockets of undervaluation remain, especially among AI-driven companies poised to capitalize on the $260 billion AI infrastructure spending surge by hyperscalers like Microsoft, Amazon, and Meta. Amid market volatility, three stocks stand out for their deep discounts to fair value, robust AI growth catalysts, and wide economic moats: Alphabet (GOOGL), NVIDIA (NVDA), and NXP Semiconductors (NXPI).
1. Alphabet (GOOGL): The AI Ecosystem Leader at a 35% Discount

Why Buy?
- Valuation: Trading at just 65% of its fair value (35% discount), Alphabet’s stock is a steal for its AI dominance. Its communications services sector—where it’s a leader—is the most undervalued on Nasdaq, trading 20% below fair value.
- Growth Drivers:
- DeepMind’s breakthroughs in protein folding and climate modeling.
- AI integration into Google’s search, ads, and cloud platforms (e.g., Gemini-powered search results).
- Subsidiary Waymo’s autonomous driving advancements, now in commercial trials.
- Moat: Wide, thanks to its unrivaled data assets, global reach, and recurring revenue streams.
Risk: Regulatory scrutiny in Europe and the U.S. could slow ad revenue growth.
2. NVIDIA (NVDA): The GPU Titan Catching a Bid at 7% Below Fair Value

Why Buy?
- Valuation: NVIDIA’s stock trades at 93% of its fair value, offering a 7% discount after a 9% correction since August 2024.
- Growth Drivers:
- $260B AI infrastructure spending: Hyperscalers are snapping up NVIDIA’s GPUs for large language model training and inference tasks.
- New markets: Autonomous vehicles (e.g., Tesla’s Dojo supercomputers) and metaverse applications.
- Software monetization: NVIDIA’s AI software stack (e.g., Riva, Clara) commands premium pricing.
- Moat: Wide, with 90%+ market share in AI GPUs and a decade-long lead in semiconductor design.
Risk: U.S.-China trade tensions could delay shipments of advanced chips.
3. NXP Semiconductors (NXPI): The Undervalued Chip Leader at a 37% Discount

Why Buy?
- Valuation: The stock trades at 63% of its fair value (37% discount), the deepest discount among wide-moat AI stocks.
- Growth Drivers:
- AI at the edge: NXP’s chips power AI in autonomous vehicles, industrial robots, and smart IoT devices.
- Long-term contracts: Key partnerships with automakers like Tesla and Volkswagen for advanced driver-assistance systems (ADAS).
- High margins: Gross margins of ~50% despite macroeconomic headwinds.
- Moat: Wide, backed by its proprietary semiconductor IP and customer relationships in automotive and industrial sectors.
Risk: Supply chain disruptions or a slowdown in global auto production.
Conclusion: Buy the Dip in Nasdaq’s AI Leaders
The Nasdaq’s recovery isn’t uniform—Alphabet, NVIDIA, and NXP are among the most compelling buys today. Alphabet’s 35% discount and AI ecosystem dominance make it a “buy the dip” favorite. NVIDIA’s 7% discount belies its $260B tailwind from hyperscalers’ capex, while NXP’s 37% discount offers asymmetric upside in AI-driven semiconductors.
Key Data Points:
- Alphabet’s communications sector trades 20% below fair value, and its AI ad revenue is growing at +30% annually.
- NVIDIA’s data center revenue is projected to double by 2026, fueled by cloud AI adoption.
- NXP’s automotive revenue grew +24% YoY in Q1 2025, with AI chips accounting for 40% of its product portfolio.
Investors should prioritize these three names for their discounted valuations, wide moats, and alignment with secular AI trends. While macro risks linger, these stocks offer a rare combination of safety and growth potential in today’s Nasdaq market.
Comments
No comments yet