Undervalued High-Growth Stocks for the AI Era: PayPal, Pinterest, and Micron Lead the Charge

The artificial intelligence (AI) revolution is reshaping industries at an unprecedented pace, creating both opportunities and overvaluations. For patient investors, the key lies in identifying fundamentally strong companies whose growth potential is underappreciated by the market. PayPal (PYPL), Pinterest (PINS), and Micron (MU) stand out as compelling candidates, offering asymmetric upside through AI-driven innovation and attractive valuation metrics.

Pinterest (PINS): AI-Powered Monetization at a Discounted PEG

Pinterest's Q4 2025 performance underscores its transformation into an AI-centric platform. The company's PEG ratio of 0.54 well below the 2.22 industry average for the Internet - Software sector suggests it is undervalued relative to its growth trajectory. This discount is justified by Pinterest's AI-driven initiatives, which are accelerating user engagement and monetization.

According to a report by , Pinterest's AI-powered shopping assistants, enhanced visual search tools, and conversational interfaces are driving a 14%-16% revenue growth in Q4 2025. These tools not only improve user experience but also expand international advertising opportunities, particularly in emerging markets. With a forward-looking PEG ratio that implies significant upside, Pinterest is positioned to capitalize on AI's potential to reshape e-commerce.

PayPal (PYPL): Agentic Commerce and Network Expansion

PayPal's strategic integration of AI into its payment ecosystem is unlocking new revenue streams. While its P/E ratio of 12.59 and 13.47 suggests moderate valuation, the company's AI-driven growth catalysts justify a higher PEG ratio. For instance, PayPal's partnership with OpenAI to embed its payment system into ChatGPT's Agentic Commerce Protocol is a game-changer. This collaboration enables seamless transactions for ChatGPT users, positioning PayPal as the first payments wallet integrated into a major AI platform.

Additionally, PayPal's Venmo-PayPal interoperability is expanding its merchant network to 35 million businesses, while AI-powered fraud prevention and payment routing optimizations are expected to boost transaction margins by 50–75 basis points. These initiatives, combined with a 7.3% year-over-year EPS growth in Q3 2025, highlight PayPal's ability to compound value through technological innovation.

Micron (MU): AI Hardware's Undervalued Workhorse

Micron's Q4 2025 results-$11.32 billion in revenue and $3.03 in non-GAAP EPS-exceeded expectations according to Seeking Alpha, yet its PEG ratio of 8.46 remains elevated. This discrepancy reflects the market's skepticism about the sustainability of its AI-driven growth. However, Micron's leadership in high-bandwidth memory (HBM) for AI applications paints a different picture.

As stated by Tech2, Micron's HBM supply is fully booked through 2025 and likely 2026, driven by surging demand for AI servers. The company's status as the only U.S.-based manufacturer of DRAM and NAND flash memory further cements its role in the AI supply chain. With data center memory sales hitting record highs and gross margins projected at 51.5% for Q1 2026, Micron's long-term potential is underpinned by its ability to monetize the AI infrastructure boom.

Asymmetric Upside for Patient Investors

The AI hype cycle has inflated valuations across the tech sector, but PayPal, Pinterest, and Micron offer asymmetric upside due to their unique positioning:
- Pinterest combines a low PEG ratio with AI-driven monetization that could outperform expectations.
- PayPal leverages AI to expand its transaction network and margins, with partnerships that create defensible moats.
- Micron benefits from structural demand for AI hardware, with its PEG ratio likely to normalize as growth accelerates.

For investors willing to hold these stocks through short-term volatility, the compounding potential of AI adoption-ranging from e-commerce to data centers-provides a compelling case for long-term outperformance.