TLDR
- Nvidia (NVDA) holds 90% market share in AI data center chips with forward P/E ratio of 24 and median analyst price target of $250
- Amazon (AMZN) announced $200 billion capital expenditure plan for 2026, up 50% from $132 billion spent in 2025
- Intel (INTC) stock climbed 140% in past year under CEO Lip-Bu Tan with Nvidia investing $5 billion for chip production partnership
- Amazon’s P/E ratio of 27 represents lowest valuation since early 2010s with AWS backlog reaching $244 billion
- Intel trades at price-to-sales ratio of 4 compared to AMD’s multiple of 10 despite flat revenue in 2025
Recent concerns about AI spending have triggered selling in technology stocks. The market weakness has created entry points for investors seeking exposure to growing companies.
Three stocks stand out with reasonable valuations and strong fundamentals. Each offers different ways to benefit from ongoing technology trends.
Nvidia Maintains AI Chip Market Leadership
Nvidia controls approximately 90% of AI data center chip market. The company reached the largest market capitalization globally.
A 2024 stock split brought shares to accessible levels. The stock now trades around $190 per share.
The trailing P/E ratio stands at 47. The forward P/E of 24 reflects next 12 months of expected earnings.
The five-year price-to-growth ratio sits at 0.73. Ratios under 1 suggest potential undervaluation relative to growth.
Analysts maintain positive ratings with 91% saying buy. The median price target of $250 implies 31% upside potential.
The stock has traded flat over the past six months. Investors expressed concerns about high valuation levels.
Nvidia’s market position remains strong in AI chips. The company continues to dominate data center GPU sales.
Amazon Invests Heavily in Cloud and AI
Amazon announced $200 billion in capital expenditure for 2026. This represents a 50% increase from $132 billion spent in 2025.
The spending targets AI and Amazon Web Services expansion. The company revealed this plan after fourth quarter 2025 earnings.
Amazon trades at a P/E ratio of 29. The stock previously traded above 50 times earnings and sometimes exceeded 100 times earnings.
The current P/E ratio of 27 matches early 2010s levels. This represents the lowest valuation in over a decade.
Amazon holds $127 billion in liquidity. The company generated over $11 billion in free cash flow during 2025.
AWS has a $244 billion backlog for cloud and AI services. This backlog increased 40% compared to last year.
Stock trades around $200 per share currently. The combination of low valuation and strong backlog suggests growth potential.
Investors questioned the massive spending increase. Some worry about returns on such large capital investments.
AWS faces competition from Microsoft and Google. The company has experienced market share pressure from rivals.
Intel Stock Rallies on Manufacturing Turnaround
Intel has gained 140% over the past year. CEO Lip-Bu Tan has driven the turnaround since taking leadership.
The company’s 18A manufacturing process improves chip performance. This technology attracted a major partnership deal.
Nvidia committed $5 billion for Intel to build chips. The agreement covers PC and data center products using NVLink technology.
Intel reported flat revenue of $53 billion in 2025. Capital spending decreased to under $15 billion from $24 billion previously.
The stock trades at a price-to-sales ratio of 4. This compares to AMD’s multiple of 10, making Intel relatively cheaper.
The manufacturing improvements have not yet appeared in financials. Revenue growth may materialize as new partnerships scale up.
Intel could emerge as alternative to TSMC in some areas. The Nvidia partnership validates the manufacturing capabilities.
Previous leadership teams fell behind competitors. Both Nvidia and AMD surpassed Intel in technical capabilities.
The current turnaround shows more tangible progress. The Nvidia investment signals confidence in Intel’s direction.
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