Less than three months after the stock market plunged on President Donald Trump's "Liberation Day" tariffs announcement, major indexes are back near all-time highs.
Investors have shrugged off concerns around tariffs and a potential economic slowdown as businesses adjusted to the new trade regime and as economic data so far around unemployment and inflation has been stable, showing that tariffs have not yet had a significant impact on the economy.
Despite the resurgence, which has led to stocks like Nvidia hitting all-time highs again, there are still deals to be found among artificial intelligence (AI) stocks. Keep reading to learn about two of them.
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1. Micron Technology
Fresh off its latest earnings report, Micron Technology (MU -1.01%) just delivered another strong round of results in the fiscal third quarter, beating estimates on the top and bottom lines and offering better-than-expected guidance for the fourth quarter.
There was one blemish in the report, which was that pricing declined slightly on a sequential basis, which led to the stock falling less than 1% on Thursday. However, Micron still looks well-positioned to capitalize on the AI boom.
Its data center business is surging, more than doubling on a year-over-year basis, pacing overall revenue growth of 37%. It also reported nearly 50% revenue growth in high-bandwidth memory (HBM), and reached record DRAM revenue, which includes HBM.
Micron's margins also improved. Its gross margin jumped from 26.9% to 37.7%, and operating margin increased from 10.6% to 23.3%. Adjusted earnings per share more than tripled from $0.62 to $1.91.
In addition to its ramping financials, Micron finds itself in an advantageous position because it's the only U.S. manufacturer of advanced memory chips, meaning it's strategically important to the country at a time when the government is focused on reshoring chip production and ensuring adequate supply. Micron was awarded $6.2 billion from the CHIPS Act, and also agreed to invest $200 billion in new foundries in R&D in the U.S., though the timeline on that is unclear.
Looking at valuation, Micron looks cheap. Based on its latest guidance, the stock trades at a forward P/E of less than 16, and analysts expect earnings per share to hit $12 in fiscal 2026, giving the stock a P/E of roughly 10 based on that forecast. Micron does face cyclical risk, but if the company can hit those numbers, the stock is a good bet to move higher.
2. Advanced Micro Devices
Another chip stock with significant upside potential is Advanced Micro Devices (AMD -1.27%). AMD might not look undervalued, according to its trailing price-to-earnings ratio of 39, but that's actually an attractive price for the company's growth potential and momentum.
AMD stock is still down by more than a third from its peak last year, but its recent results show it's growing quickly in the key data center segment, and it has emerged as the only real challenger to Nvidia in the AI GPU market. Though it's a distant second there, that's proven to be a valuable position, and is likely to earn it support from customers, as having competition for Nvidia is to their benefit as well.
In its first-quarter earnings report, revenue rose 36% to $7.4 billion, led by a 57% jump in revenue to $3.7 billion, which was driven by growth in its EPYC CPU and Instinct GPU chips. AMD's strength in both CPUs and GPUs, arguably give it a competitive advantage as well and help differentiate the company from competitors. AMD also impressed in the client segment, where revenue jumped 68% to $2.3 billion thanks to strong demand for its Zen 5 Ryzen processor. While that growth rate is likely to slow, AMD has been steadily grabbing market share from Intel, and that trend is likely to continue.
The company is also making moves to beef up its AI capabilities. It acquired ZT Systems in the first quarter to improve its expertise in servers and rack-level solutions, which it said would help it address the data-center AI accelerator opportunity, which it said was expected to reach $500 billion by 2028. It's also acquired a number of AI start-ups, which should accelerate its advances in AI.
Analysts are expecting rapid growth from the company, forecasting adjusted EPS of $5.71 in 2026. Based on that figure, the stock trades at a forward P/E of 25.2, making AMD looks like a good deal, considering its growth potential in AI and beyond.
