Alphabet(US:GOOG) The Motley Fool·2025-01-24 10:10Core Viewpoint - The technology sector continues to present attractive investment opportunities, particularly in stocks like Nvidia, Taiwan Semiconductor Manufacturing (TSMC), and Alphabet, which show strong growth and favorable valuations. Group 1: Nvidia - Nvidia has been a top-performing stock with a forward price-to-earnings (P/E) ratio of about 31 and a price/earnings-to-growth (PEG) ratio just below 1, indicating it is undervalued [2][5] - The company is experiencing significant revenue growth, with a projected triple-digit percentage increase for 2024 and a 94% year-over-year revenue increase in Q3 [3][5] - Nvidia holds a dominant 90% market share in graphic processing units (GPUs), essential for AI infrastructure, supported by its CUDA software platform [4][5] Group 2: Taiwan Semiconductor Manufacturing (TSMC) - TSMC is the leading semiconductor manufacturer with a forward P/E of 23.5 and a PEG of 0.33, indicating an attractive valuation [6] - The company has seen a 37% revenue increase last quarter and a gross margin improvement of 600 basis points year over year, reaching 59% [8] - TSMC's pricing power and growth in AI chip demand position it as a bargain buy at current valuation levels [7][8] Group 3: Alphabet - Alphabet is trading at a forward P/E of just over 19, making it one of the cheapest mega-cap AI stocks [9] - Google Cloud's revenue increased by 35%, with operating income rising from $266 million to $1.95 billion, indicating a profitability inflection point [10] - The company is also a leader in digital advertising and is integrating AI into its services, with a 15% revenue increase last quarter and a 37% rise in earnings per share [11][12]