2 Genius Artificial Intelligence (AI) Stocks Trading at Irresistible Prices

Source Motley_fool

Key Points

  • Microsoft's stock slide is unprecedented.

  • Investors are concerned about Meta's spending on AI infrastructure.

  • 10 stocks we like better than Microsoft ›

There are a handful of artificial intelligence (AI) stocks that trade for ridiculously high prices that should be avoided. Likewise, there are several that are trading for bargain valuations, and those are the ones investors must pinpoint to maximize returns. Two that I think are at the top of the bargain list are Microsoft (NASDAQ: MSFT) and Meta Platforms (NASDAQ: META).

Both of these stocks have been ignored by the market in 2026, and could make a huge comeback in the second half of the year. This makes them strong candidates to buy now, as the returns could be explosive if they can get back to all-time highs.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »

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Microsoft

Microsoft is commonly recognized as one of the leaders in artificial intelligence. It has close ties to OpenAI, the maker of ChatGPT, and has integrated several of its products into Copilot, Microsoft's AI platform. This business has exploded in popularity, with annual recurring revenue rising 123% year over year to $37 billion. Another segment of Microsoft's AI strategy is Azure, its cloud computing wing. Azure is the second-largest cloud computing platform, and it's growing at a 40% pace due to huge AI demand.

Altogether, Microsoft's revenue rose at an 18% pace and diluted earnings per share increased at a 23% clip during its most recent quarter. That doesn't add up to a stock that should be down over 30% from its all-time high, but that's exactly where Microsoft stock finds itself. But is it a true bargain?

Microsoft's fiscal year 2027 started on July 1, so using earnings projections for that 12-month period to value the stock is a smart idea. At 19 times forward earnings estimates, it's the cheapest the stock has been in the past three years.

MSFT PE Ratio (Forward 1y) Chart

MSFT PE Ratio (Forward 1y) data by YCharts

I think that makes Microsoft a compelling investment, and investors should consider buying shares now, as it likely won't stay beaten down for long.

Meta Platforms

Meta Platforms is in a stranger situation than Microsoft. At first glance, it's doing incredibly well. Most of Meta's revenue comes from advertising on its social media platforms like Facebook, Instagram, Threads, and WhatsApp. It has integrated several AI tools into these products, and that has generated strong returns, with revenue rising 33% year over year during Q1.

That seems like it should be enough for investors to stay interested, but that's far from the case. Instead, the market is concerned about Meta's spending on AI infrastructure, as the returns it has provided in advertising haven't been enough to justify its cost. The market wants real, revenue-producing products, and Meta hasn't delivered those yet. As a result, the stock trades for a pretty cheap 17.5 times forward earnings estimates as I write this.

META PE Ratio (Forward) Chart

META PE Ratio (Forward) data by YCharts

If any of Meta's AI investments pan out, this will be an absolute steal of a price to pay for the stock. On the flip side, if Meta's AI strategy is a flop, it still has a strong advertising business to fall back on, and that business is more lucrative than countless other big tech companies.

I think Meta is a strong stock to buy down nearly 30% from its all-time high. It won't take much excitement to send Meta's stock to new heights, and by getting in now, investors have the chance to secure big upside.

Should you buy stock in Microsoft right now?

Before you buy stock in Microsoft, consider this:

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Keithen Drury has positions in Meta Platforms and Microsoft. The Motley Fool has positions in and recommends Meta Platforms and Microsoft. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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