The excitement about artificial intelligence is spurring a generation of technology spending.
Why is it important?:Nvidia counts some of its 7 grand companions as customers buying sophisticated AI chips. And the world's most valuable company says that if geopolitical tensions between the US and China are eased, they can earn even more. However, investors are debating whether the market is experiencing an AI boom or an AI bubble. How should purchase investors think about investing in AI? Are there any undervalued stocks remaining today? Dave Sekera is the US market strategist and co-host for Morningstar Research Services Morning filter Podcast.
Six questions about investing in AI
- please Invest insightsDave. Nvidia recently concluded an epic Seven revenue season, showing that AI spending remains strong. What does this mean for a tech-driven stock market rally?
- Do you think investors' expectations for these megacap names are unfairly high? Why or why?
- The Nvidia NVDA sits at the heart of the geopolitical competition between the US and China. The company said it had not sold sophisticated AI chips to China in the last quarter, and there is a $50 billion opportunity. What do you think about this bottleneck and its impact?
- Many market watchers are divided on whether the current environment is an AI boom or an AI bubble. Can you talk about the outlook for Morning Star?
- How should purchase investors think about investing in artificial intelligence?
- What are the most undervalued AI stocks at the moment?
Important Quotes on Investing in AI
Like the end of this year, I think the theme is probably really a theme, but in 2026, it's certainly going to be looking for companies out there to take AI. And now some companies today are beginning to incorporate it into their existing products and services, claim more revenue, and grow their own toplines using AI.
Additionally, companies that can employ AI can incorporate it into their own business practices, allowing them to be more efficient, more productive and generate higher sales margins. So I think it will really be the next wave of companies investors are trying to invest in today.
Dave Sekera, Head of US Market Strategy, Morningstar Research Services
Six Undervalued Stocks to Invest in AI
What's underestimatedThese narrow moat companies and wide range of companies fall into one of three camps: hardware, software/hyperscaler, and AI beneficiaries. Morningstar analysts rated these stocks either three or four stars.
- Taiwan Semiconductor Manufacturing Co Ltd ADR TSM
- Marvell Technology Inc MRVL
- ASML Holding NV ADR ASML
- Microsoft Corp MSFT
- Salesforce Inc CRM
- ServiceNow Inc now
More on AI Investment from Morningstar
Nvidia's meteor rise shows no signs of slowing down, according to Brian Collero, a senior equity analyst at Morningstar. Morningstar has increased its fair value estimate for widemote high-tech companies from $170 to $190, maintaining a very high Morningstar uncertainty rating. Meanwhile, Marvel's long-term outlook looks promising, writes William Kerwin, senior equity analyst at Morningstar. The market is still undecided whether chip designers will grow their customer base, and Morningstar is sure that will happen.
Morningstar editor Tori Brobett and equity analysts look at which companies will benefit as AI evolves with the best AI stocks to buy now. Susan Dziubinski, Morningstar Investment Specialist and Co-Host Morning filter The podcast writes about which seven epic stocks are most exposed to AI investment themes.
It's approaching: Learn about the evaluation of the new Morningstar medalists in semi-liquid funds at a live webinar on Morningstar YouTube channel on Wednesday, September 10th. First investor series.
