The article discusses undervalued stocks in the AI sector, particularly highlighting Alphabet and Taiwan Semiconductor Manufacturing. Both companies are seen as cheap compared to the S&P 500. Alphabet's revenue rose by 12% year over year to $90 billion, driven by Google Cloud and resilient advertising revenues. Key concerns involve potential tariff impacts, but management remains optimistic about maintaining growth despite these challenges. The perceived current low valuation of these stocks presents a buying opportunity, with expectations for future premium valuations.
Among the cheap stocks are Alphabet and Taiwan Semiconductor Manufacturing. Both are actually priced cheaper than the broader market, which gives me confidence to label them cheap.
Alphabet is the parent company of Google, YouTube, the Android operating system, and many other businesses. However, most of its revenue comes from advertising.
In the first quarter, Alphabet's revenue rose 12% year over year to $90 billion, driven by strong performance in Google Cloud and advertising.
Management was quite confident in its ability to handle this headwind and only expects a slight effect in Q2, further indicating resilience in their business.
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