The phrases "dirt cheap" and "artificial intelligence" aren't normally included in the same sentences. There are a lot of concerns about excessively high stock valuations in the AI space, so finding good values in it isn't always easy. However, I think there are a couple of fairly obvious ones hiding right under investors' noses: Meta Platforms (META 1.81%) and Microsoft (MSFT +3.62%). Both can be purchased at low valuations, yet offer incredible growth prospects.
Image source: Getty Images.
1. Meta Platforms
While the name Meta Platforms may not be familiar to all investors, Facebook probably is. Facebook changed its name to Meta in 2021 to align with its intent to convert itself into a metaverse-focused company. While that didn't pan out, the lessons learned from that endeavor may inform how it pursues its AI aspirations.
NASDAQ: META
Key Data Points
Meta has several ongoing AI projects it's investing in, including one with the goal of delivering a superintelligence platform to the masses. It's also working on AI smartglasses. If it can bring a product like that to market, it could be a major success and become a new form factor through which AI is deployed.
That's the bull case for the AI wing of Meta, but we'll have to wait to see if it actually comes to fruition.
In the meantime, the company is using AI to improve the advertising platforms on its social media sites, and the results have been impressive. During Q1, its revenue rose 33% year over year. That's strong growth for a mature business and indicates that it has had major success in implementing AI. Despite this strong growth rate, Meta's stock is trading at an unusually low valuation by two metrics.
META PE Ratio (Forward) data by YCharts.
Meta is a rare combination of growth and value, and with the potential catalyst of AI smartglasses looming on the horizon, I think it's an excellent AI investment pick.
2. Microsoft
Microsoft used to be more commonly mentioned in the company of other AI leaders, up until this year. However, the stock has lost over 10% of its value in 2026, even as most of its peers are up by double-digit percentages. That's concerning for investors, as it appears there could be something wrong with Microsoft.
NASDAQ: MSFT
Key Data Points
However, I think this is a case of a broken stock, not a broken business.
In Microsoft's latest fiscal quarter, its revenue increased by 18%. Meanwhile, the annual run rate of its AI business rose 123% year over year to $37 billion. Another major part of Microsoft's AI exposure is its cloud computing unit, Azure, which saw 40% growth in the quarter. With AI computing demand still rising, it's likely that this elevated growth rate will persist for some time, making Microsoft a near-guarantee to continue growing at double-digit percentage rates.
Despite that, Microsoft's stock is valued at a fairly low level. From a forward price-to-earnings ratio standpoint, it hasn't been this cheap over the past three years.
MSFT PE Ratio (Forward) data by YCharts
Based on its price-to-operating-cash-flow ratio, Microsoft stock hasn't been this cheap since 2019.
MSFT Price to CFO Per Share (TTM) data by YCharts.
Investors shouldn't let this opportunity slip past them. Microsoft stock will eventually bounce back, and when it does, the rally could make shareholders a ton of money.
