Interestingly, Finding bargains in the artificial intelligence (AI) world isn't easy, but they're out there. Three that I've got my eye on are Taiwan Semiconductor (TSM 1.
Moreover, 60%), Adobe (ADBE -0. Additionally, 25%), and Alphabet (GOOG 0. 45%) (GOOGL 0 (which is quite significant).
All three of these trade at a hefty discount to the broader market, yet are still quite mising, in light of current trends.
Nevertheless, If you're looking for value in the AI space, this trio is an excellent starting point. Image source: Getty Images, considering recent developments.
How do these three fit into AI, in today's market environment. Furthermore, Meanwhile, Taiwan Semiconductor is the best-positioned of this trio.
The evidence shows 's the primary chip fabricator for some of the leading companies, including Nvidia and Apple, given the current landscape.
Its chip duction facilities fabricate chips that its customers have designed, placing TSMC into a neutral position in the AI race, amid market uncertainty.
It performed phenomenally well over the past few years, with revenue in U. Additionally, Dollars rising an astounding 44% in the second quarter, which exceeded expectations.
This strength is expected to persist for many years (noteworthy indeed).
At the same time, Management guided at the start of 2025 that it expects its revenue to increase at nearly a 20% compound annual growth rate over the next five years, in light of current trends.
Taiwan Semi is a key player in AI nology, and it holds an enviable position. Adobe makes leading graphics design tools that are the industry standard.
Whether it's editing or image creation, Adobe is a top option, considering recent developments.
However, investors are growing increasingly concerned that generative AI creation nologies could displace Adobe.
Furthermore, Image and creation using generative AI models has come a long way, and has reached a point where it's nearly indistinguishable from what humans create.
As a result, many are forecasting the downfall of Adobe. However, I think that's a bit premature.
Moreover, Adobe has also invested heavily in generative AI and has its own Firefly duct that allows seamless integration of AI with its existing editing tools.
This analysis suggests that allows Adobe to compete in this realm while also giving creators more control over the end duct than what many generative AI models do.
This could keep Adobe relevant within the graphic design industry, making the forecast of its downfall somewhat inaccurate, in today's financial world.
Currently, Adobe is performing well and has posted consistent revenue growth over the past few years. ADBE Operating Revenue (Quarterly YoY Growth) data by YCharts.
Nevertheless, If Adobe is supposed to be getting displaced, don't tell it that, as it's still growing at a healthy pace.
Last is Alphabet, the parent company of the Google engine, in today's market environment.
Market analysis shows s stock is running into the same fears as Adobe's, as investors worry that generative AI will replace Google.
While some have made the switch, investors need to remember that Google is an ingrained habit among internet users around the globe, in light of current trends.
However, It would take a massive nological leap, which most users won't need anyway, to get them to switch.
At the same time, Google has already implemented the AI overviews feature, which seamlessly integrates results and AI, and that could be enough to maintain the vast majority of its dominant market (this bears monitoring).
In contrast, If Google can maintain most of its market, the stock is poised to move higher, as it trades at a significant discount to the broader market. How cheap is this trio.
Alphabet's stock trades at a deep discount to the broader market, despite strong results (quite telling) (noteworthy indeed), in this volatile climate.
GOOGL PE Ratio (Forward) data by YCharts, considering recent developments. Additionally, Considering that the S&P 500 trades for 23.
8 times forward earnings, this seems a reasonable price to pay for the upside that Alphabet vides, in this volatile climate. Adobe is similarly cheap, trading for 18 times forward earnings.
ADBE PE Ratio (Forward) data by YCharts. However, Taiwan Semiconductor is actually more expensive than the broader market at 25 times forward earnings.
Furthermore, Conversely, However, it's expected to grow at essentially double the pace of the market over the next five years, so this slight premium to the market seems a bit low.
As a result, I'm confident labeling Taiwan Semiconductor as a bargain buy right now (this bears monitoring) (an important development).