Nvidia is trading at a bargain price while still having a big opportunity in front of it.
Pinterest shares are in the bargain bin, despite solid growth and backing by a big Wall Street firm.
Salesforce stock is on the clearance rack but has a big potential agentic AI opportunity.
Despite the stock market's strong performance over the past few years, there are still some really good bargains in the market, even in the tech sector. When you can buy a top tech stock at a bargain valuation, it's often a good move. Let's look at three discounted tech stocks to buy now.
While Nvidia (NASDAQ: NVDA) isn't typically viewed as a bargain stock, trading at a forward price-to-earnings (P/E) ratio of just 22 based on current-year analyst estimates, the stock is downright cheap for a market leader that just reported 73% revenue growth last quarter and is forecasting its fiscal first-quarter revenue growth to accelerate. When the premier AI infrastructure play is trading at that type of valuation, it could be a smart move to grab some shares.
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As long as AI infrastructure spending continues to be robust, Nvidia is going to prosper. While its graphics processing units (GPUs) will likely cede some market share in the coming years, it will still hold the dominant position in AI model training, as most foundational AI code was written on its CUDA software platform, giving it a wide moat.
Meanwhile, the company made a smart move in acquiring the talent of Groq and licensing its technology, which should strengthen its long-term position in the inference market, where it is already the market leader. Between its valuation and strong growth, Nvidia's stock is a solid buy.
Arguably, one of the most undervalued growth stocks in the market right now is Pinterest (NYSE: PINS). The company has been seeing solid growth, including 14% revenue growth and 30% adjusted EPS growth last quarter.
However, Pinterest is more exposed to large retailers and brands, which have reduced ad spending, than competitors like Meta Platforms, and as such, its growth hasn't been as robust. This has disappointed investors, who have sent the stock lower this year. Following its sell-off, the stock trades at a forward P/E of just under 13.
However, the company has embraced artificial intelligence (AI) to really transform its platform from an online vision board to more of a shopping discovery platform, making it more desirable to advertisers. It is also using AI to help advertisers better recognize users with a high intent to purchase and to improve conversion. This should eventually help the company thrive in a better large retailer ad environment.
Meanwhile, Pinterest has the backing of activist investor Elliott Investment Management, which just bought $1 billion worth of convertible notes from the company to help it fund a large buyback program. Between its valuation, still-solid growth prospects, and the backing of Elliott, the stock is a bargain buy.
Image source: Getty Images
The software-as-a-service (SaaS) sector has been hit hard this past year due to fears that AI will disrupt its businesses. Selling has been relatively indiscriminate, with investors selling first and asking questions later, leaving some high-quality names at bargain values. One such name is Salesforce (NYSE: CRM), which trades at a forward price-to-sales (P/S) ratio of 4 and a forward P/E ratio of just over 15 based on current-year analyst estimates.
Salesforce helped disrupt the software industry by being one of the first big companies to deploy the SaaS model. Now it is looking to use the base it formed in customer relationship management (CRM) to become an agentic AI leader. The company has made some smart under-the-radar moves with the acquisition of master data management company Informatica and the launch of Data 360 to position itself as its customers' master of records. With AI needing clean, structured data to avoid hallucinations (providing or acting on wrong information), this is the perfect platform to launch AI agents from.
With Salesforce projecting it can grow its revenue at a double-digit rate through 2030, this is a cheap stock to scoop up while it's down.
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Geoffrey Seiler has positions in Meta Platforms, Pinterest, and Salesforce. The Motley Fool has positions in and recommends Meta Platforms, Nvidia, Pinterest, and Salesforce. The Motley Fool has a disclosure policy.