Undervalued and Profitable: 2 Artificial Intelligence (AI) Stocks for Long-Term Portfolios

Group 1: Core Investment Strategy - The strategy of investing in great companies that are aligned with growing trends and trading at attractive valuations is highlighted as a proven method for long-term gains [1] - Artificial intelligence (AI) is identified as a significant secular and disruptive trend that can contribute trillions to the global economy, benefiting companies like Marvell Technology and Micron Technology [2] Group 2: Marvell Technology - Marvell Technology experienced a turnaround with a revenue growth of 63% year-over-year in Q1 of fiscal 2026, reaching $1.89 billion, compared to a 5% growth in fiscal 2025 [6][5] - The company reported a GAAP net income of $0.20 per share in Q1 of fiscal 2026, a significant improvement from a loss of $0.25 per share in the same period last year [6] - AI demand has driven a 76% increase in data center revenue to $1.44 billion, with expectations for continued momentum in the coming years [6][8] - Marvell's addressable market for AI is projected to grow from $21 billion in 2023 to $75 billion by 2028, with the company aiming to capture over 20% of this market [9][10] - The stock trades at 22 times earnings, presenting a discount compared to the Nasdaq-100 index's earnings multiple of 31, indicating a strong long-term opportunity [13] Group 3: Micron Technology - Micron Technology specializes in compute and storage memory chips, with recent growth driven by the deployment of its products in AI data centers [14] - The high-bandwidth memory (HBM) produced by Micron is crucial for AI accelerators, with the HBM market expected to grow to $86 billion by 2030, reflecting a CAGR of 68% [17] - Micron's revenue increased by 59% in the first half of the current fiscal year, with a GAAP profit of $3.08 per share, a turnaround from a loss of $0.40 per share in the previous year [19] - Consensus estimates predict a 439% increase in adjusted earnings to $7 per share this year, followed by a 58% increase next year, with the stock trading at just 11 times forward earnings [20]