Investing around $3,000? Consider these Potential Discounted Stocks for Prospected Gains Through 2025 and Beyond.
While the tech sector has been thriving, particularly in tech stocks, there are still promising investments for those with modest resources. Here are three tech stocks that have shown impressive growth and are trading at reasonable prices:
If you have $3,000 unallocated funds that aren't earmarked for monthly expenses, an emergency fund, or debt payment, these three stocks are worth considering.
1. Nvidia
Nvidia (NVDA 0.10%) has been a market darling, offering impressive returns for investors. Yet, the stock remains appealing due to a modest forward P/E ratio of about 31 when estimated for 2026, and a PEG ratio just below 1. Typically, a PEG ratio below 1 suggests a stock is undervalued, especially for growth stocks like Nvidia that tend to have PEG ratios well above 1.
In addition, Nvidia has demonstrated remarkable revenue growth. Analysts predict the company will procure triple-digit percentage revenue growth for the second consecutive year in 2024, and its revenue jumped 94% year over year in Q3. Moreover, experts expect Nvidia to generate over 50% revenue growth in 2025.
Nvidia's success can be attributed to its leading position in the graphic processing unit (GPU) market. With more powerful computing capabilities, GPUs have become critical to AI infrastructure. Nvidia holds a 90% market share in GPUs, largely due to its CUDA software platform. Since its inception, the CUDA platform has become a versatile tool for developers to create GPU-centric applications in various fields, including AI.
There's no indication that the demand for GPUs will wane. AI models need increasingly powerful computing resources to train, and multiple companies are investing vast amounts in developing AI infrastructure. Even industry leaders like Microsoft are planning to pour $80 billion into AI-powered datacenters in 2023.
Nvidia's continued demand and appealing valuation make it a reasonable bargain buy.
2. Taiwan Semiconductor Manufacturing
Taiwan Semiconductor Manufacturing (TSMC 0.64%), or TSMC for short, is another company reaping the benefits of the AI infrastructure buildout. Its stock also boasts a moderate forward P/E ratio of 23.5 times 2025 analyst estimates and a PEG of 0.33.
As the world's largest semiconductor maker, TSMC supplies chips to giants like Nvidia, Apple, Broadcom, and others. This scale and technological expertise have made TSMC the dominant force in advanced chip manufacturing. Its competition struggles to keep up, enabling TSMC to command high prices and boost margins.
Last quarter, TSMC's revenue soared 37%, while its gross margins improved by 600 basis points year over year and 120 basis points sequentially, reaching 59%. TSMC has also increased prices for advanced chips in 2025, according to reports.
The company's pricing power, coupled with the ongoing growth of AI chips, makes TSMC a bargain buy at current valuations.
3. Alphabet
While Nvidia and TSMC benefit from AI infrastructure, Alphabet (GOOGL -0.20%) (GOOG -0.23%) is actively building out its data center infrastructure to boost its cloud computing division, Google Cloud. It's also one of the cheapest mega-cap AI stocks, trading at a forward P/E of just over 19 times analysts' 2025 estimates.
Google Cloud's revenue surged 35% last quarter, while the business segment's operating income increased from $266 million to $1.95 billion as it hit a profitability inflection point. This growth can be attributed to an influx of customers looking to create their AI models and applications using Google Cloud's infrastructure. Additionally, Alphabet has developed custom AI chips with help from Broadcom, leading to lower costs and reduced AI inference processing times.
Beyond cloud computing, Alphabet continues to dominate digital advertising through platforms like Google and YouTube, respectively the world's leading search engine and video streaming service. The company is also implementing AI technologies in various applications, such as smart search results and text-based image and video generating tools.
In total, Alphabet's revenue increased 15% last quarter and its EPS soared 37%.
The company's growth opportunities extend to emerging markets. Its Waymo autonomous ride-hailing service operates in several American cities, and its Quantum AI initiative has made considerable strides, positioning itself as a pioneer in quantum computing.
With a low valuation and a diverse set of strong and emerging business segments, Alphabet stands out as a solid bargain.
If you're considering investing in the tech sector with limited funds, these three stocks might be worth exploring. Apart from Nvidia and Taiwan Semiconductor Manufacturing, which are already thriving in the AI infrastructure buildout, Alphabet is also a contender. This tech giant is expanding its cloud computing division, Google Cloud, and is profiting from digital advertising, all while trading at a relatively low forward P/E ratio based on 2025 estimates.