Microsoft And 2 Other Undervalued Tech Stocks To Own

Tech shares have been hit hard after AI focused stocks sold off sharply, as investors reassess how tighter US rules and slower data centre build outs could affect the sector. Market selloffs often leave some solid businesses trading below what their fundamentals suggest. This article looks at three undervalued US technology stocks from our screening tool that filters for quality companies priced at a discount to their underlying potential.

The three stocks highlighted below are only a small sample from the wider opportunity set, as the full screen surfaced another 142 US tech companies with similarly compelling stories that are not covered in this article. If you want to identify and analyze potential high conviction ideas for yourself, head straight to the Undervalued Tech screener

Microsoft (MSFT)

Microsoft matters for this Undervalued Tech screen because its Azure driven Intelligent Cloud business supplies the AI and infrastructure plumbing other companies rely on, even as the wider group still spans Office, gaming, devices and consumer software.

Microsoft is a global technology giant providing software, cloud infrastructure, business applications, and devices across consumer and enterprise markets, with Azure and other Intelligent Cloud services anchoring its link to the Undervalued Tech theme. It generated about US$180.2b from the United States and US$166.3b from other countries, and the stock carries a market value of roughly US$3.98t.

"Microsoft just completed a fiscal year in which it earned $101.8 billion in net income. That is not a typo. One hundred and one point eight billion dollars in profit."

The real test for investors will be how one unseen pressure on Microsoft’s AI heavy cloud buildout ultimately affects long term profitability.

That pressure point is exactly what the full narrative for Microsoft unpacks, showing where Microsoft’s AI buildout could accelerate returns or quietly compress future economics.

Intel (INTC)

Intel is another key Undervalued Tech pick because its chips do double duty, powering everyday PCs while its Data Center and AI hardware supplies much of the behind the scenes muscle for cloud and enterprise AI workloads.

Intel Corporation designs and manufactures computing chips and related hardware, with about US$32.9b from Client Computing and Physical AI, US$23.4b from Data Center and AI, and US$22.4b from Intel Foundry operations, giving the stock a roughly US$277.7b market value.

"Intel plans to strengthen customer trust in its foundry services by ensuring reliability and customer service, potentially leading to an increase in foundry revenue as the company builds its reputation and customer base."

What happens if a single capacity build decision ends up tipping the balance between future AI demand and Intel’s margin recovery path?

If that tension between capacity and margins is what you care about, the full narrative for Intel shows where Intel’s AI ambitions could accelerate or stall the recovery story.

QUALCOMM (QCOM)

Qualcomm ties into the Undervalued Tech theme through its QCT chip business, which supplies Snapdragon processors and connectivity platforms for mobile, automotive, IoT, and edge AI devices. The group carries a market value of about US$185.3b.

Qualcomm gives this screener direct exposure to real-world semiconductors rather than just AI headlines. QCT hardware and software platforms already sit inside phones, cars, and connected devices, which is where the story becomes more relevant for investors watching the next leg of the AI infrastructure buildout.

"Scaling of Qualcomm’s High Bandwidth Compute architecture in data center AI workloads, supported by claimed step changes in bandwidth and capacity per watt and early interest from memory vendors and hyperscalers, has the potential to support the company’s target of more than 5% share of a roughly US$1t AI data center market and to influence QCT revenue and gross margin over the coming years."

The key question is what happens to Qualcomm’s earnings power if one ambitious set of targets in that AI buildout falls even slightly short of plan.

If that possibility nags at you, the full narrative for QUALCOMM explains where Qualcomm’s AI initiatives could lead earnings to move differently from expectations or to accelerate more quickly than anticipated.

Seeking Fresh Alternatives Before They Fly

Fresh opportunities do not wait. Breakout momentum can get caught quickly once the crowd notices, while quieter ideas stay under the radar for now. Scan these ideas and get in early.

• Target income streams that aim to keep paying while prices swing, and shortlist potential high yield anchors using the 6 dividend fortresses.
• Track future facing infrastructure as AI spending shifts into real world hardware, and map out possible beneficiaries with the 53 AI infrastructure stocks.
• Spot early movers in robotics before momentum gets fully priced in, and review a curated pool of automation players through the 89 robotics and automation stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com