Editor
Right now, it seems like everyone is rushing to invest in AI stocks, which often come with sky-high prices. However, if you look a little closer, you’ll discover three companies that might actually be good deals—even someone like Warren Buffett would likely find them appealing. While many investors grab onto the latest AI trend without thinking, seasoned investors remember Buffett’s advice: look for great companies at fair prices, even amidst the current hype. It can be tough to find reasonably priced options, but Micron Technology, Dell Technologies, and Alphabet are worth considering in this crowded market.
Memory Maker Micron Rides the AI Wave Smart
Micron Technology has quietly established itself as a key player in the growing AI industry, but not in the way you might expect. Instead of making headlines with flashy products like chatbots, this Boise-based company is focusing on the essential components that make AI possible.
Sarah Chen, a semiconductor analyst at TechInsight Research, highlights their innovative 1-gamma memory chip, which addresses the increasing demand for faster and more compact technology. This new chip is particularly important as AI capabilities expand beyond traditional data centers and into mobile devices.
The numbers tell a strong story. In Micron’s fiscal second quarter, sales of high-bandwidth memory exceeded $1 billion for the first time, contributing to a total revenue of $8.1 billion—an impressive 40% increase from the previous year. Their net income also soared to $1.6 billion, translating to earnings of $1.41 per share, compared to just $0.71 the year before.
Looking ahead, management expects to maintain this growth, forecasting around $8.8 billion in revenue for the third quarter, up from $6.8 billion last year. It seems this company, often seen as just a commodity player, has much more to offer.
Dell’s Hardware Hunger Games Pay Off
Dell Technologies might come off as just an old-school PC manufacturer, but they’ve really changed their game by stepping into the world of AI infrastructure. They’re now working with some major players in AI, like CoreWeave, which is quite popular in that space.
This shift is evident in their recent earnings report. For the first quarter, their sales rose by 5% to $23.4 billion. Jeff Clarke, the COO, mentioned that there’s been an “exceptionally strong demand for AI-optimized servers.” That’s good news, especially considering the current tough economic climate that’s making companies cautious about spending on tech.
Although recent government budget cuts worried investors and caused Dell’s stock to drop, Marcus Rodriguez, an analyst at Digital Trends Advisory, sees this as a chance to buy. He highlighted that while there might be some short-term ups and downs, Dell is well-positioned for a long-term growth in AI. In fact, they received over $12.1 billion in orders for AI hardware recently, even more than all of fiscal 2025, and they’re forecasting at least $101 billion in revenue for fiscal 2026, up from the previous estimate of $95.6 billion.
Alphabet’s AI Integration Strategy Delivers Results
While other companies are trying to add AI to their current products, Alphabet has taken a different route. They’ve been busy creating their own AI technology and integrating it into everything they offer, from search to cloud services.
This approach seems to be paying off. The new AI features have helped boost the number of users, which led to Google’s revenue hitting $50.7 billion in the first quarter, up from $46.2 billion the previous year. Google Cloud also saw significant growth, with sales rising to $12.3 billion from $9.6 billion.
Overall, Alphabet’s first-quarter revenue climbed to $90.2 billion, up from $80.5 billion, and their net income grew impressively to $34.5 billion compared to $23.7 billion last year. Earnings per share nearly doubled to $2.81.
Despite facing some antitrust issues, CEO Sundar Pichai thinks the appeals could take years. Meanwhile, Alphabet is committed to investing heavily in AI, planning to spend $75 billion this year, up from $52.5 billion in 2024.
The Valuation Case for Patient Money
Investors who admire Warren Buffett are starting to pay attention. Even though Micron, Dell, and Alphabet are heavily involved in AI, they’re trading at reasonable prices when compared to popular companies like Nvidia and Microsoft. Veteran investor Patricia Wong from Meridian Capital Management points out, “These aren’t risky AI bets based on hype; they’re solid businesses with a long history of making money and paying out dividends, now benefiting from AI trends.” Their price-to-earnings ratios show that while Nvidia and Microsoft are expensive due to their AI dominance, the other three companies provide similar opportunities at lower costs.
Looking Ahead: Value Meets Innovation
The AI boom is expected to take years to fully develop, not just a few months. If you’re a patient investor and focus on buying good companies at fair prices, like Warren Buffett recommends, you might do better than those trying to jump on the latest trends. Companies like Micron, Dell, and Alphabet are finding unique ways to benefit from AI’s growth, but right now, their valuations don’t seem to reflect that potential. For those who want to invest in AI without spending too much on high-flying stocks, these three could be great options to consider. Sometimes, the best finds are right in front of us, even in popular sectors.
