2 Top Bargain Stocks Ready for a Bull Run

While plenty of tech stocks have risen to lofty valuations, there are still bargains to be found. Let's take a closer look at two stocks on the sales rack that investors can buy right now.

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Taiwan Semiconductor Manufacturing

Trading at a forward price-to-earnings (P/E) ratio of around 22 times 2026 analyst earnings estimates, Taiwan Semiconductor Manufacturing (NYSE: TSM) is one of the cheapest stocks in the semiconductor space tied to artificial intelligence (AI). What makes it an even bigger bargain is that it has one of the widest moats and some of the best visibility.

As competitors struggled, TSMC positioned itself as a vital cog in the semiconductor value chain. It's proven to be the only foundry that can manufacture advanced chips at small nodes (how many transistors fit on a chip) with consistently high yields (low defect rates) at scale. This has made it an important partner for chip designers, with whom it now works closely on their chip roadmaps. This strong visibility has led the company to project that AI chip demand will grow at a mid-40% compound annual growth rate (CAGR) through 2029.

It has also given the company solid pricing power, as it is essentially the only game in town. According to multiple sources, the company is set to raise prices on smaller nodes in 2026 for the fourth straight year, with reports of price hikes of 3% to 10%. The company is also set to begin production at 2nm nodes soon, with pricing projected to be 10% to 20% higher than for 3nm nodes.

As cloud computing companies and other hyperscalers continue to ramp up spending on AI infrastructure, TSMC is one of the companies best positioned to benefit. Best of all, as the battle between graphics processing units (GPUs) and custom AI ASICs (application-specific integrated circuits) heats up over which chips will power the future of AI workloads, TSMC wins regardless, as all the major chip designers require its services to make their advanced chips. That makes the stock one to buy down at these bargain levels.

GitLab

One of the most maligned stocks in the market right now is GitLab (NASDAQ: GTLB), which has pushed its valuation down to a forward price-to-sales multiple below 6.4, based on 2026 analyst estimates. This is for a profitable company with a recurring business model that has achieved gross margins near 90% and has never experienced quarterly revenue growth below 25% since its initial public offering in 2021. It also has a pristine balance sheet with nearly $1.2 billion in cash and short-term investments and no debt, and it generates solid free cash flow.

Last quarter, the company grew its revenue by 29%, while its adjusted EPS climbed 60% and its free cash flow more than quadrupled. Meanwhile, its current remaining performance obligations, which is a metric that provides visibility into future revenue over the next 12 months, jumped 31%.

So why has the stock struggled so much this year? The big reason is that the company has long had a seat-based (per-user) pricing model, and investors are worried that customers who use its product to securely write and store code will eventually start reducing their headcounts and start using AI agents to write code instead of developers. Thus far, this has not played out, as GitLab has seen strong dollar-based net retention of 121% over the past year, with 80% of that increase driven by customers expanding seats to accelerate software development in this new AI era.

Meanwhile, the company is set to implement a new hybrid seat-plus-usage pricing model. This should be both an offensive and defensive move. With its Agent Duo offering, which can help developers write code and complete other tasks, GitLab's platform is now giving its customers more value, and this new pricing model will help reflect that increased value. In addition, while the company has not seen any impact from a reduction in coders (in fact, it's seen seat expansion accelerate over the past year), this model helps protect it in case that eventually does happen.

At this point, the risks look overblown, and the stock is way too cheap to ignore.

Geoffrey Seiler has positions in GitLab. The Motley Fool has positions in and recommends GitLab and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.