The Motley Foolยท2025-08-18 09:00Group 1: AI Stock Opportunities - Several AI stocks are considered excellent long-term buys despite the presence of overvalued options in the market [1] - Three notable stocks identified are Alphabet, Taiwan Semiconductor, and The Trade Desk, all expected to see significant growth by 2030 due to undervaluation [2] Group 2: Alphabet (GOOG) - Alphabet, the parent company of Google, primarily generates revenue from its search engine, which is currently under scrutiny due to concerns about generative AI models potentially replacing it [4] - Despite a recent recovery, Alphabet's stock remains cheaper than the S&P 500, trading at a discount compared to its forward earnings [6] - Google Search has integrated AI features, resulting in a 12% year-over-year revenue growth in Q2, indicating strong long-term prospects [6][7] Group 3: Taiwan Semiconductor (TSM) - Taiwan Semiconductor is a key player in the AI arms race, benefiting from increased capital expenditures in data centers [8] - The company projects AI-related revenue to grow at a 45% compound annual growth rate (CAGR) over the next five years, with overall revenue expected to increase at nearly a 20% CAGR [8] - Although its stock trades at 25 times forward earnings, this is considered a reasonable premium given its projected growth, making it an attractive buy [9] Group 4: The Trade Desk (TTD) - The Trade Desk operates a software platform for digital advertising and is transitioning customers to its AI-based product, Kokai, despite facing some challenges [10] - The stock has seen a decline of around 40% from recent highs due to slower growth and market reactions [11] - The digital advertising market continues to expand, and The Trade Desk presents a significant long-term investment opportunity, with potential for explosive returns over the next five years [12]