2 Leading Tech Stocks to Buy in 2025

Tech stocks soared in 2024. The tech sector may have taken a pause in recent weeks, but the Nasdaq Composite (NASDAQINDEX: ^IXIC) market index is still hovering just below the record highs it reached in December.

But the soaring stock prices have not reached every corner of the tech market. A couple of legendary industry leaders are trading at significant discounts to their 52-week peaks. Read on to see why you should take a deeper look at semiconductor veterans Micron Technology (NASDAQ: MU) and Intel (NASDAQ: INTC) right now.

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Memory maker Micron Technology: Down 35% from recent highs

Micron benefits greatly from the artificial intelligence (AI) boom. In particular, systems used for training or operation of generative AI tools require a lot of memory.

That's true even for DeepSeek, the large language model (LLM) known for its low hardware expenses. The AI accelerator cards running the latest DeepSeek v3 version need more than 1.5 terabytes (TB) of high-speed video memory (VRAM). Lighter models can be managed from a beefy laptop, but even the lower-quality DeepSeek v2 236B must have more than half a TB of video memory. That's kind of hard to fit in a single system, especially a laptop. The largest laptop RAM modules on sale today top out at 48 gigabytes (GB), while servers can get their digital hands on 256-GB cards.

And that's a resource-thrifty generative AI system. More ambitious models like OpenAI's ChatGPT use orders of magnitude more processing power -- and memory. And these big-iron solutions are not going away. Remember, the lighter DeepSeek system is possible only because it can tap into the work already done by beefier solutions.

So Micron's stock fell along with AI accelerator designer Nvidia (NASDAQ: NVDA) when DeepSeek hit the world stage in January. In fact, Micron's shares took a deeper haircut than Nvidia's. And the stock was arguably undervalued before the DeepSeek discount.

Today, the stock is changing hands at just 9 times forward earnings estimates, according to Finviz. These estimates are about 50% more optimistic than the current run-rate for earnings, against which Micro is trading at a 13x multiple. Given that management expects "a substantial revenue record" and much better profitability in the just-started fiscal 2025, that seems like a reasonable assumption.

Sales rose 84% year over year in the latest earnings report while the bottom line swung from a robust loss to a solid net profit. Micron is on track to deliver strong growth in 2025, and the stock price doesn't reflect this bullish reality yet.

Processor veteran Intel: Down 48% from recent highs

Intel is a different story. The semiconductor veteran is going through a lot of changes, losing market share to longtime rivals Nvidia and Advanced Micro Devices (NASDAQ: AMD), and running an expensive strategy shift under an interim management team. It's a lot, even for a world-class innovator with deep pockets.

But Intel's situation is less dire than its stock chart suggests. Intel shares are trading just a hair above book value, a valuation usually reserved for companies on the brink of bankruptcy. But Intel is nothing of the sort. It's still a market-leading maker of server and PC system processors, not to mention its respectable Gaudi line of AI accelerators. And within the next four to five years, its strategy shift should result in a world-class chip-making foundry business located mostly on American soil.

That's a promising position. Taiwan Semiconductor Manufacturing (NYSE: TSM) is the global leader in that industry today. Its stock is valued at nearly 8 times its enormous book value. I'm not saying that Intel will match that valuation ratio in a few years, but it certainly deserves a higher figure than the bargain-bin ratio it's getting today.

Yes, many things will need to go right as Intel explores a very different strategy. A lot of the company's future success hinges on finding the right CEO for the ongoing sharp strategy turn. That being said, an industry legend of Intel's caliber should have no trouble finding top-tier management talent. Who wouldn't love to be known as the leader who turned Intel's fortunes around and created an unmatched American chip factory?

So Intel is a risky bet, but one I'm glad to make at this rock-bottom stock price. In fact, I bought more Intel shares a couple of weeks ago, and am still interested in grabbing some more.

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*Stock Advisor returns as of February 3, 2025

Anders Bylund has positions in Intel, Micron Technology, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: short February 2025 $27 calls on Intel. The Motley Fool has a disclosure policy.