Five Undervalued AI Plays for 2026: Semiconductor and Cloud Standouts
Memory chipmaker Micron Technology trades at single-digit forward P/E despite projected 50% revenue growth through fiscal 2026, presenting rare value in AI infrastructure. The company's high-bandwidth memory chips have become critical components in AI server racks.
Taiwan Semiconductor Manufacturing Company maintains 17 Buy ratings with Goldman Sachs projecting 40-45% upside potential. As the primary fabricator for Nvidia's AI accelerators, TSMC's technological lead appears undervalued relative to fabless chip designers.
Qualcomm emerges as a dark horse in edge AI, embedding neural processors in over 2 billion smartphones annually through its Snapdragon platforms. The company's automotive AI solutions now power infotainment systems across 40 million vehicles.
Marvell Technology supplies optical networking chips enabling AI cluster communications, with analysts forecasting 42% revenue growth and 80% earnings expansion by 2026. Its custom silicon solutions for cloud giants remain gross margin accretive.
Alibaba Cloud represents China's answer to AWS in AI services, trading at 12x forward earnings versus 28x for Western peers. The division's Tongyi Qianwen large language model has been adopted by 80% of mainland China's Fortune 500 enterprises.