The five AI stocks to watch in 2026: Why Micron, TSMC, and Qualcomm are must-not-miss?

Investment Opportunities in the “Valley” of the AI Chip Boom

In 2026, investment enthusiasm in the AI sector remains strong, but the question is: Most AI stocks have already been driven to sky-high valuations. However, if you know where to look, you can still find some AI stocks that are seriously undervalued — they have genuine growth prospects, reasonable valuations, and analysts generally remain optimistic.

The common point among these five tech companies is that they are all involved in key segments of the AI industry chain but have not been fully appreciated by the market. Some supply memory chips, some manufacture processors, some focus on mobile AI, and others are building data center networks — covering different corners of the entire AI ecosystem.

Hidden Champion in the Memory Chip Sector: Micron Technology

Micron(Micron Technology, MU) appears to be the cheapest.

This company specializes in producing DRAM and high-bandwidth memory chips needed for AI data centers. When GPUs handle machine learning tasks, these memory chips work quietly in the background. As AI applications explode, the demand for high-performance memory soars — and Micron happens to control this “supply line.”

Even more astonishing is the valuation: Micron is currently trading at a single-digit forward P/E ratio, yet it is expected to see revenue growth of over 50% in fiscal year 2026. Compared to the S&P 500, such a combination is quite rare.

Analysts are generally bullish — 29 buy ratings, 5 strong buy ratings, only 3 hold, and no sells. The average target price is close to $295. The logic from analysts is straightforward: tight supply in the market gives Micron pricing power, and this advantage is expected to persist until 2026.

The “Essential Path” in Global Chip Contract Manufacturing: TSMC

TSMC(TSMC, TSM) is the “infrastructure” of the chip industry.

All top tech companies you can think of — Nvidia, Apple, AMD — rely on TSMC for their AI chips. This is not a preference but irreplaceable. TSMC controls the world’s most advanced chip manufacturing processes, and competitors are currently unable to match it.

On valuation, Goldman Sachs has a clear bullish outlook: there is a 40-45% upside potential compared to the current price. This is recognition at the investment bank level.

Supporting data is also solid: revenue is expected to grow about 30% in 2026, with a further 28% increase in 2027. Analyst surveys show 10 buy ratings, 2 hold, and no bearish views. Such consensus is rare among tech stocks.

The key is that TSMC operates with scale, stable profitability, and a healthy balance sheet — providing confidence for long-term holdings.

Pioneers in Mobile and Automotive AI: Qualcomm

Qualcomm(Qualcomm, QCOM) takes a different route.

While everyone is focused on data center AI, Qualcomm’s Snapdragon platform brings AI into smartphones, laptops, cars, and IoT devices. This is called “edge AI” — running directly on devices rather than relying on cloud servers.

Market attention to Qualcomm is less than that for chip giants, which actually presents an opportunity. Qualcomm’s P/E ratio is significantly lower than most AI concept stocks, yet its growth prospects are comparable. With the proliferation of AI smartphones and increased automotive chip sales in 2026, profit growth is well-supported.

About 25% of analysts give strong buy ratings, 31% buy. Although there was a recent downgrade, the overall sentiment remains positive.

The “Behind-the-Scenes Hero” of Data Center Networks: Marvell Technology

Marvell(Marvell Technology) supplies the “neural network” infrastructure for data centers — high-speed network equipment and accelerator chips.

Imagine large-scale data centers building AI compute clusters, needing to connect and coordinate thousands of processors. This “connection work” relies on Marvell’s products. The larger the AI system, the greater the demand for network capacity.

The data is quite attractive: revenue is projected to grow 42% in fiscal year 2026, with profit growth forecast at 80%. Such rapid profit growth is uncommon in the semiconductor industry.

Analyst ratings: 4 strong buy, 22 buy, 12 hold, with a consensus of “moderate buy,” and no sell ratings. The average target price is about $115, with room for upside from current levels.

This stock is more volatile than large tech companies, making it suitable for investors comfortable with price fluctuations.

Cost-Performance Leader in Cloud AI: Alibaba

Alibaba(Alibaba) has a somewhat unique situation.

This company operates China’s largest e-commerce platform and has a rapidly growing AI cloud business. Interestingly, Alibaba’s valuation is significantly lower than Western peers — market concerns over Chinese regulation and economic conditions are priced in.

But from a fundamental perspective: AI-driven cloud revenue is growing faster than traditional e-commerce, indicating a shift in the company’s growth momentum. Analysts give 17 buy ratings, 3 hold, and 1 sell, leaning toward optimism. Although there have been occasional downgrades, the overall consensus remains positive.

Alibaba’s earnings multiple is relatively low, and its balance sheet is healthy. From a valuation standpoint, it’s a discounted entry point in the AI cloud space.

Summary: Five Different Entry Points into AI

These five companies are all undervalued, but each has a different story:

• Micron is a memory supply shortage
• TSMC is the sole choice for chip manufacturing
• Qualcomm is a pioneer in mobile AI
• Marvell is the backbone of data center networks
• Alibaba is a cost-effective option in cloud AI

They cover the entire AI industry chain from chip design and manufacturing to application. If you are optimistic about AI investment opportunities in 2026 but want to avoid stocks with inflated valuations, these five companies are worth keeping on your radar.