The S&P 500 is back to hitting new highs, but it's also becoming more expensive. The CAPE ratio, or cyclically adjusted P/E ratio, is nearly 40. That's the highest it's been in more than a decade. Whether or not that means the market is due for a correction, it certainly seems like stocks are trading at higher valuations, and it's harder to spot bargains.
But they exist, even in the high-growth artificial intelligence (AI) space. Consider Amazon (AMZN 1.49%) and Taiwan Semiconductor Manufacturing (TSM +0.18%), both of which look like super values right now and offer continued long-term opportunities.
Image source: Getty Images.
1. Amazon
Amazon is one of the major hyperscalers that's pouring billions into developing a top-of-the-line AI program. CEO Andy Jassy has stressed many times that there's going to be a shift from on-premises information technology (IT) spend, which represents about 85% of company spend today, to the cloud, and Amazon is preparing for it. It's investing more than $125 billion in 2026 in the AI program, after spending about that much in 2025, and it's upgrading everything from its chips to its large-language models (LLMs) to its range of services for clients, like its semi-custom Bedrock platform.
NASDAQ: AMZN
Key Data Points
It's growing in every way, from its core e-commerce business through the Amazon Web Services (AWS) cloud business to advertising and more. Adding the AI business to these segments takes the whole business up a notch, and positioning itself to benefit from the AI windfall gives it years of further growth ahead.
Yet Amazon stock trades at less than 34 times trailing-12-month earnings. The stock is only up 6% over the past year, but as it keeps reporting strong growth and harnesses its opportunities, it should keep rewarding investors.
2. Taiwan Semiconductor Manufacturing
Taiwan Semiconductor is a core player in AI production. It's responsible for 85% of global start-up semiconductor prototypes, and it works with nearly every high-level AI player in nearly every type of technology, also beyond AI.
Even though it's a well-established industry giant with solid relationships and high profitability, including a 54% operating margin in the 2025 fourth quarter, it's still growing quickly. Sales increased 21% year over year in the quarter. It has tremendous AI tailwinds, and all the money that Amazon and its peers are spending comes back at some level to Taiwan Semiconductor.
NYSE: TSM
Key Data Points
Yet Taiwan Semiconductor stock trades at only 32 times trailing-12-month sales, and it's barely moved over the past year, even though the stock has gained 60%. It's a great value for growth investors -- or any investor.
