Key Takeaways
- Nvidia (NVDA) trades at a forward‑earnings multiple of ~25×, which looks cheap next to peers Broadcom (~40×) and AMD (~69×) despite being the world’s largest AI‑chip maker.
- Meta Platforms (META) is valued at ~18.6× forward earnings, well below Nvidia, while analysts project 26% revenue growth this year and 19% next year, driven by AI‑enhanced advertising.
- Sandisk (SNDK) has surged ~650% this year, yet still sells at only ~10× fiscal‑2027 earnings estimates, reflecting strong NAND‑memory demand from AI data centers and an ongoing chip shortage.
- All three stocks offer a combination of relatively low valuation multiples and robust growth prospects, making them potential “bargain” AI‑sector picks.
- Investors should watch for macro‑economic headwinds, competitive shifts, and the sustainability of each company’s growth trajectory before adding positions.
Overview: Hunting for Undervalued AI Plays
Finding bargain artificial intelligence (AI) stocks isn’t an easy thing to do. Many companies in the sector are somewhat overvalued, and some trade at excessive premiums. However, three that I believe are trading at a discount are Nvidia (NVDA 3.58%), Meta Platforms (META +4.26%), and Sandisk (SNDK +6.71%). I think all of them represent incredible values today in the grand scheme of things.
Nvidia: A “Bargain” Giant?
Describing Nvidia as a bargain stock when it’s the largest company in the world may seem odd, and it probably is. But when you dig into its valuation, I think it makes complete sense.
“NVDA PE Ratio (Forward) data by YCharts.”
Nvidia trades at 25 times forward earnings, which isn’t necessarily cheap. However, compared with some of its peers, it looks pretty cheap. Fellow AI chipmakers Broadcom (AVGO 0.55%) and AMD (AMD +3.93%) trade for 40 and 69 times forward earnings, respectively. Additionally, neither of these two is growing nearly as fast as Nvidia, which grew at an 85% pace in the first quarter; AMD and Broadcom grew revenues by 38% and 29%, respectively.
The gap is further exaggerated when you consider their respective 2027 earnings projections — Nvidia trades for just 17.7 times next year’s earnings. While that’s a long way out, it shows that there is still solid, long‑term upside here. Meanwhile, AMD and Broadcom trade for 39 and 25 times next year’s earnings, respectively. So, you can purchase Nvidia’s stock today at a lower valuation relative to its earnings over the next 12 months than AMD or Broadcom’s valuation relative to their expected earnings in 2027. That’s most of a year’s worth of added growth potential that investors can get by purchasing Nvidia versus its peers. And Nvidia is still the most dominant company in the chip industry, even if it’s not priced like it.
Meta Platforms: Advertising Power Meets AI Spend
Unlike most of its big tech peers, Meta Platforms hasn’t received a premium valuation from the market lately.
“META PE Ratio (Forward) data by YCharts.”
Meta trades for 18.6 times forward earnings, which is well below Nvidia’s valuation. However, other than Nvidia, it’s the fastest growing of this megacap group.
“META Revenue (Quarterly YoY Growth) data by YCharts.”
The market is more focused on Meta’s AI spending and its success (or lack thereof) in that industry than it is on the dominant advertising business the company has built around its social media platforms. Meta has integrated AI tools into its advertising platform, and this is driving increased revenue growth. Wall Street analysts are bullish on Meta’s ability to sustain an elevated growth rate, as they project 26% growth this year and 19% next year. Strong growth and a cheap price tag make the stock a solid pick right now.
Sandisk: Memory Boom Fuels a Discounted Stock
Sandisk has been on an absolute tear this year. Its stock has risen nearly 650%, which may make it seem like an odd inclusion on a list of bargain stocks. However, Sandisk’s rise has been directly tied to its business, which has really taken off.
“Today’s Change(6.71%) $115.14 Current Price $1,831.50 … Gross Margin 56.04%”
AI data centers demand a massive amount of memory, and Sandisk serves this market with NAND memory that goes into solid‑state drives (SSDs). SSDs are a critical component of data centers and are essential for long‑term data storage. With NAND memory and SSDs in short supply relative to demand, Sandisk and its peers have been able to steeply increase the prices of their products.
That combination has resulted in strong revenue and earnings growth for Sandisk, and the memory chip shortage won’t be solved over the next few months, so it’s likely the company’s impressive gains can continue.
“Wall Street thinks so: Sandisk’s fiscal 2026 wraps up in June, and Wall Street analysts project 332% year‑over‑year revenue growth in its Q4. For its fiscal 2027, they project 116% revenue growth. Sandisk trades at just 10 times fiscal 2027 earnings estimates, making it a solid bargain to buy now.”
Risks and Considerations
While the valuation arguments are compelling, each stock carries its own set of risks. Nvidia’s dominance could invite intensified competition from AMD, Intel, or emerging AI‑chip startups, potentially pressuring margins. Meta’s reliance on advertising makes it vulnerable to macro‑economic slowdowns and regulatory scrutiny over data privacy and AI ethics. Sandisk’s boom is tightly coupled to the current NAND shortage; a rapid increase in supply or a shift toward alternative memory technologies could curb its pricing power. Investors should weigh these factors alongside the growth prospects before allocating capital.
Conclusion: Why These Three Stand Out
In a market where many AI‑related names command premium multiples, Nvidia, Meta Platforms, and Sandisk each present a relatively attractive valuation paired with strong forward‑looking growth metrics. Nvidia’s chip leadership, Meta’s AI‑enhanced advertising engine, and Sandisk’s pivotal role in the memory‑intensive AI data‑center ecosystem combine to create a trio that, according to the analysis, offers incredible value today. As always, diligent research and a clear understanding of each company’s risk profile are essential steps for any investor looking to capitalize on these opportunities.
https://www.fool.com/investing/2026/06/04/3-top-bargain-ai-stocks-to-buy-right-now/