Key Points
Nvidia is still the king of AI infrastructure and trades at a reasonable valuation.
Micron stock continues to ride the huge memory supercycle.
Amazon stock is still undervalued, with both its e-commerce and cloud businesses performing well.
- 10 stocks we like better than Nvidia ›
The market continues to rip higher, once again led by the tech-heavy Nasdaq Composite, which has been hitting all-time highs. While the rally has pushed up stock valuations, there are still some growth stocks with attractive valuations you can buy before it's too late.
Let's look at three incredibly attractive growth stocks I'd be scooping up right now.
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Nvidia: The AI infrastructure king
Despite its tremendous growth, Nvidia's (NASDAQ: NVDA) stock is still reasonably valued, trading at a forward price-to-earnings (P/E) ratio of 27.5 times this year's analyst estimates and only 20 times next year's earnings consensus.
While the artificial intelligence (AI) market is shifting and there are likely to be more winners than in the past, Nvidia is still the blue chip stock to own. The company dominates the AI model training market, and that is unlikely to change anytime soon, given the strong moat it has established in this arena through its CUDA software platform.
At the same time, the company has also positioned itself for the market shift toward inference and agentic AI. It "acquired" Groq (or parts of it, at least) and its language processing unit (LPU) technology, focused on inference, and plugged it into its CUDA ecosystem. Meanwhile, it's also developed its own central processing units (CPUs) and created NemoClaw, with the help of its SchedMD acquisition, positioning it as a major hardware and software player in agentic AI.
Nvidia is a company that is not sitting still and continuing to evolve, which is a great reason to buy the stock while its valuation is still reasonable.
Micron: A memory supercycle winner
Trading at a forward P/E of below 8 times fiscal 2027 estimates, Micron Technology (NASDAQ: MU) stock is still reasonably valued with solid potential upside ahead. The stock has historically traded at a lower valuation given the cyclical nature of the DRAM (dynamic random access memory) market, which has seen numerous boom-and-bust cycles over the years. However, given the importance of high bandwidth memory (HBM), a special form of DRAM, within AI infrastructure and the big three memory makers starting to sign long-term agreements of between three to five years for the first time, the memory landscape is shifting.
Trading at a forward P/E of below 8 times fiscal 2027 estimates, Micron stock is still reasonably valued with solid potential upside ahead. The stock has historically traded at a lower valuation given the cyclical nature of the DRAM (dynamic random access memory) market, which has seen numerous boom-and-bust cycles over the years. However, given the importance of high bandwidth memory (HBM), a special form of DRAM, within AI infrastructure and the big three memory makers starting to sign long-term agreements of between three to five years for the first time, the memory landscape is shifting.
GPUs and other AI ASIC accelerators need to be packaged with HBM to optimize their performance, and inference can often be more memory-intensive than AI model training. While Nvidia's LPUs use SRAM instead of HBM, SRAM is physically much larger than HBM, so it's not suitable for larger models and harder to scale, which should lead HBM to remain the dominant type of memory packaged with GPUs. In fact, Nvidia is using LPUs more as a supplement for inference in its racks.
With longer-term deals in place and HBM growing in lock-step with AI accelerator growth, Micron should have many years of strong growth ahead.
Amazon: An e-commerce and cloud leader
Another stock to grab before it's too late is Amazon (NASDAQ: AMZN). While its valuation has risen with the stock's recent performance, at a 31 times forward P/E, it still trades at a large discount to its brick-and-mortar peers, Walmart and Costco Wholesale, which trade at over 40 times earnings. Meanwhile, its retail business has been growing more quickly than these peers, and it has been seeing huge operating leverage in its e-commerce operations due to the use of robots and AI.
At the same time, the company's cloud computing business, Amazon Web Services (AWS), has been seeing growth accelerate. This is Amazon's most profitable segment, and the company is investing aggressively to capture the huge demand it is seeing. With partnerships in place with Anthropic and OpenAI, and it spending $200 billion in capex this year, expect AWS' revenue to continue to accelerate throughout the year. Also note that the company's custom chip business, led by its Trainium accelerators and Graviton CPUs, is seeing strong growth, while also giving it a cost advantage for internal use with inference.
Amazon is a stock that has been jogging in place for too long, and now that it has broken out, expect more upside ahead.
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Geoffrey Seiler has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, Micron Technology, Nvidia, and Walmart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
