3 Undervalued AI Stocks You Can Buy With 40% Upside or More

Parkev Tatevosian, CFA•Sep 5, 2026

Summary

Parkev presents a bullish thesis for the artificial intelligence sector, focusing on infrastructure and manufacturing companies that Parkev believes are currently undervalued by the market. Parkev highlights that while skepticism exists, the underlying demand for AI chips and memory is accelerating. Parkev provides specific fair value calculations for three companies, suggesting that each has the potential for a 40% to 56% price increase over the next year to year and a half. Parkev also addresses the risks, such as geopolitical tensions and industry cyclicality, but concludes that the long-term growth drivers remain intact.

Taiwan Semiconductor (TSM): Parkev calculates a fair value of $609 per share, which is significantly higher than the market price of $416, representing a 46% upside. Parkev describes TSM as the best manufacturing company in the world, benefiting from its partnerships with Nvidia, Apple, and AMD for both cloud and edge AI devices. Parkev notes that while geopolitical tensions with China are a concern, TSM is actively diversifying its production to the US, Europe, and Japan to mitigate these risks.

Micron (MU): Parkev estimates a fair value of $1,473 for Micron, implying a 56% upside from its current market price of $941. Parkev points to the massive capital expenditure boom from hyperscalers like Amazon and Meta, which is expected to reach $1.3 trillion by 2027, as a primary catalyst. Parkev emphasizes that Micron's management is reducing cyclicality by signing strategic customer agreements that provide revenue visibility into the 2030s.

Nvidia (NVDA): Parkev sets a fair value for Nvidia at $339, suggesting a 55% upside from the market price of $219. Parkev highlights Nvidia's "full-stack" solution and 80-90% market share as dominant competitive advantages that keep its products sold out for the foreseeable future. Parkev acknowledges risks regarding competition and the financial health of AI startups like OpenAI but maintains that Nvidia is the best stock to buy right now and is the largest position in Parkev's portfolio.

Mentioned Stocks

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev estimates a fair value of $1,473 for Micron, representing a 56% potential upside from the $941 price. Parkev emphasizes the massive capital expenditure growth from tech giants like Microsoft and Alphabet. Additionally, Parkev believes Micron is becoming less cyclical due to long-term strategic contracts that provide revenue visibility into the 2030s.

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NVDA

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev values Nvidia at $339 per share, indicating 55% upside from its $219 price level. Parkev highlights Nvidia's 80-90% market share and its unique ability to provide a complete 'full-stack' solution. Despite competition and industry concerns, Parkev states that Nvidia is the best stock to buy right now and confirmed it is Parkev's largest personal portfolio holding.

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TSM

Sentiment: BUYAction: RECOMMENDED

Reasoning: Parkev calculates a fair value of $609 for Taiwan Semiconductor, suggesting over 46% upside from the $416 market price. Parkev highlights TSM's dominance in semiconductor manufacturing and its critical role as a partner for Nvidia and Apple. While Parkev acknowledges geopolitical risks, Parkev notes that TSM is expanding its footprint to the US, Europe, and Japan to diversify risk.

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