Despite the recent sell-off in tech stocks, investors should maintain a long-term perspective as we are still in the early stages of the AI investment wave. Integration of AI into both business and daily life is in its infancy, with significant advancements expected over the next five years. In light of this, it is essential to identify strong stock bargains within the market, particularly in AI-related companies that are currently undervalued. Key players in the AI sector include Taiwan Semiconductor (TSMC), ASML, Nvidia, and Broadcom. These companies are instrumental to the AI revolution. TSMC is the leading chip foundry, serving clients like Nvidia and Broadcom with its cutting-edge fabrication technology. Its management anticipates a remarkable 45% compound annual growth rate (CAGR) in AI-related revenue over the next five years, while overall revenue is expected to grow around 20%. This demand has prompted TSMC to announce an additional $100 billion investment to expand its U. S.

facilities, further demonstrating the strong market for chips. ASML, which creates essential machines for chip fabrication, particularly its unique extreme ultraviolet (EUV) lithography technology, stands to benefit from TSMC’s growth. When TSMC scales up its operations, ASML, as the sole provider of EUV machines, will see positive effects. Nvidia, a major producer of graphics processing units (GPUs) for AI applications, and Broadcom, which designs custom AI accelerators known as XPUs, are also key to the anticipated growth. Both companies cater to a vast market and can coexist as they target different workloads. All four companies are well-positioned in the AI sector, and it would take significant challenges to hinder their growth. Currently, their stocks are undervalued compared to their historical prices, presenting an attractive investment opportunity. Focusing on forward price-to-earnings (P/E) ratios is particularly telling, especially with TSMC standing out as the most affordable option at under 20 times its forward earnings. While all four stocks are cheaper than they have been in recent history, TSMC is especially appealing for investment.