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5 Cheap, Leading AI Stocks That Are Screaming Buys in April
AMZNAmazon(AMZN) The Motley Fool·2025-04-12 08:25

Core Viewpoint - The recent stock market crash has created opportunities to invest in leading AI stocks, which are currently undervalued despite ongoing market volatility due to tariffs and trade wars [1] Group 1: Nvidia - Nvidia is the market leader in AI chips, holding over 80% market share in the GPU space, with significant revenue growth, having more than doubled sales in each of the past two years [2][4] - The company is well-positioned to benefit from the ongoing AI infrastructure buildout, with predictions that data center capital expenditure will reach 1trillionby2028[3]−Nvidia′sstockiscurrentlytradingataforwardP/Eratioof21.5andaPEGratioof0.4,indicatingitisundervalued[4]Group2:Broadcom−BroadcomleadsindevelopingcustomAIchips,which,despitehigherupfrontcostsandlongerdesigntimes,offerbetterperformanceandlowerpowerconsumptioncomparedtostandardGPUs[5]−Thecompanyhasidentifiedaserviceablemarketopportunityof1 trillion by 2028 [3] - Nvidia's stock is currently trading at a forward P/E ratio of 21.5 and a PEG ratio of 0.4, indicating it is undervalued [4] Group 2: Broadcom - Broadcom leads in developing custom AI chips, which, despite higher upfront costs and longer design times, offer better performance and lower power consumption compared to standard GPUs [5] - The company has identified a serviceable market opportunity of 60 billion to 90billionwithitsestablishedcustomersbyfiscalyear2026andhasrecentlyaddednewclientslikeApple[6]−Broadcom′sstockistradingataforwardP/Eofjustover23,andthecompanyhasinitiateda90 billion with its established customers by fiscal year 2026 and has recently added new clients like Apple [6] - Broadcom's stock is trading at a forward P/E of just over 23, and the company has initiated a 10 billion buyback to leverage its low stock price [7] Group 3: Amazon - Amazon, while primarily known for e-commerce, generates most of its profits from cloud computing through Amazon Web Services (AWS), which is experiencing rapid growth due to AI workloads [8][9] - The company plans to invest 100billionindatacentercapitalexpenditurethisyeartoalleviatecapacityconstraintsandhasdevelopedcustomAIchipsforcostadvantages[9]−Amazon′sstockistradingat27.5timesthisyear′sanalystestimates,markingoneofitscheapestvaluationshistorically[10]Group4:MetaPlatforms−MetaPlatformsisadvancingAIwithitsLlamaAImodel,whichhasincreaseduserengagementandadrevenue,leadingtoa14100 billion in data center capital expenditure this year to alleviate capacity constraints and has developed custom AI chips for cost advantages [9] - Amazon's stock is trading at 27.5 times this year's analyst estimates, marking one of its cheapest valuations historically [10] Group 4: Meta Platforms - Meta Platforms is advancing AI with its Llama AI model, which has increased user engagement and ad revenue, leading to a 14% rise in average ad prices and a 21% increase in revenue [12] - The company is also developing a new social media platform, Threads, which has grown to 320 million monthly active users and is expected to be monetized in the future [13] - Meta's stock is trading at a forward P/E multiple of only 20.5, indicating it is undervalued [13] Group 5: Salesforce - Salesforce is focusing on becoming a leader in agentic AI through its Agentforce platform, which allows customers to create AI agents with minimal coding [14][15] - The company has introduced an AI agent marketplace to expand use cases, with a consumption-based pricing model of 2 per interaction, representing a significant market opportunity [15] - Salesforce's stock is trading at a forward P/S multiple of 5.7 and a forward P/E multiple under 22, suggesting it is a bargain given its growth potential [16]