As the S&P 500 and Nasdaq Composite hover near their all-time highs, it might seem like a bad time to shop around for higher-growth tech stocks. However, a lot of the market's broader gains were driven by a handful of massive tech companies like Nvidia.
If you dig just a little deeper, you can find plenty of promising tech stocks in high-growth markets that are still trading at discount valuations. Let's take a closer look at three of them: Taiwan Semiconductor Manufacturing (TSM +5.08%), Super Micro Computer (SMCI +8.71%), and Strategy (MSTR 0.84%).
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The chip play: TSMC
Taiwan Semiconductor Manufacturing, or TSMC, the world's largest and most advanced contract chipmaker, is the linchpin of the global semiconductor market. Most of the world's fabless chipmakers -- including Nvidia, AMD, Qualcomm, and Apple -- use TSMC's foundries to manufacture their smallest and densest chips.
NYSE: TSM
Key Data Points
In its latest quarter, TSMC generated 60% of its revenue from its smallest 3nm and 5nm nodes. In terms of platforms, 60% of its revenue came from the high-performance computing (HPC) market, which includes Nvidia and other high-end artificial intelligence (AI) chipmakers. The rapid growth of that red-hot market is offsetting its dependence on smartphones (which accounted for 27% of its revenue) and other devices.
From 2024 to 2027, analysts expect TSMC's revenue and earnings per share (EPS) to grow at compound annual growth rates (CAGRs) of 23% and 26%, respectively. That growth should be driven by the secular expansion of the cloud and AI markets, the memory market's current upswing, and the stabilization of the smartphone and PC markets. Its stock still looks like a bargain at 19 times next year's earnings -- and it remains one of the simplest ways to profit from the semiconductor market's growth without betting too heavily on a single chipmaker.
The AI play: Supermicro
Super Micro Computer, more commonly known as Supermicro, produces liquid-cooled AI servers for data centers. It controls a smaller share of the traditional server market than Hewlett Packard Enterprise and Dell Technologies. Still, it established an early-mover's advantage in the AI server space before those bigger competitors.
NASDAQ: SMCI
Key Data Points
Last year, Supermicro's stock slumped as it grappled with a delayed 10-K filing, the departure of its auditor, persistent delisting threats, and regulatory probes. But it eventually overcame all those existential threats by hiring a new auditor, finally filing its annual report to avoid a delisting, and placating the government regulators.
From fiscal 2025 (which ended this June) to fiscal 2028, analysts expect Supermicro's revenue and EPS to both grow at CAGRs of 29%. It's expected to sell more top-tier systems powered by Nvidia's newest Blackwell Ultra chips, integrate its modular "building block" systems into more hyperscale cloud deployments and AI clusters, and further differentiate itself from its closest competitors with its liquid-cooled systems. Those are stellar growth rates for a stock that trades at just 17 times next year's earnings.
The Bitcoin play: Strategy
Strategy, which was formerly known as MicroStrategy, was once a slow-growth provider of data analytics software. But that all changed in 2020, when the company abruptly shifted gears and started to hoard Bitcoin. As of this writing, it holds 640,250 Bitcoins, worth $68.8 billion. That's nearly 85% of its enterprise value of $81.4 billion, and makes it the world's single largest corporate holder of Bitcoin.
NASDAQ: MSTR
Key Data Points
Strategy's core software business is barely growing, since it faces intense competition from newer cloud-based platforms. But last year, it launched an ambitious "21/21" plan ($21 billion in equity offerings and $21 billion in fixed-income security offerings) to buy even more Bitcoin through 2027. In other words, it's evolving into an all-in play on Bitcoin. Strategy co-founder Michael Saylor believes Bitcoin's price could soar about 19,400% to $21 million over the next 21 years.
If that parabolic rally actually happens, Strategy could be a bargain right now at 11 times its forward earnings. So if you're bullish on Bitcoin, this stock might be a great way to profit from the top cryptocurrency's long-term growth without directly holding the volatile coins.
