Investors do not typically associate the term “dirt cheap” with artificial intelligence stocks. The value of artificial intelligence stocks has increased after years of AI hype and industry excitement, which pulled up the stock prices of even slightly related technology companies. However, a detailed analysis shows that only some AI companies achieve perfect market valuations.
The two leading technology firms, Meta Platforms and Microsoft, currently display stock prices that seem surprisingly fair, because of their impact on artificial intelligence development. Both companies operate successfully within the Magnificent Seven, while maintaining good records of profitability and making significant AI investments.
The real issue is not whether they’re good buys, but it’s about which one makes more sense at the moment and is suitable for present-day needs.
Meta Platform’s Case
Meta maintains its primary competitive advantage through its social media network, which reaches more than 3.5 billion daily users across its various applications. The advertising industry considers this level of market presence to be perfect, which enables the company to maintain high revenue streams.
The company reached such strong financial results that it started dividend payments in 2024, which surprised investors who only knew about its growth spending practices.
Meta has established artificial intelligence as its main focus for business development. The company uses AI technology to create smarter and more profitable advertising through its data center construction and its development of large language models.
These current enhancements will increase the performance, while upcoming developments will create completely new sources of income. Meta currently trades at 22 times forward earnings, which investors should consider a bargain, because the company maintains both growth and its active artificial intelligence research efforts.
Microsoft’s Case
Microsoft demonstrates its artificial intelligence capabilities through a less dramatic manner, but it has more substantial impact. The company provides complete enterprise AI solutions through its cloud business, which includes software tools and advanced chips that are used for large-scale AI projects.
However, Microsoft needs to expand its infrastructure because customer demand exceeds its current capacity to generate revenue growth during every quarter of the year.
After investors expressed their dissatisfaction with recent performance the stock price decreased, yet the company maintains a strong outlook for the future. Also, Microsoft generates substantial artificial intelligence income, and is one of the few companies that have the ability to deploy AI solutions at a worldwide scale.
The stock trades at 24 times forward earnings, which represents its lowest valuation point in several years, but still presents a unique investment opportunity for this high-quality company.
Better Buy Right Now
Meta and Microsoft both function as reliable investments, which brings stability, earnings potential, along with artificial intelligence advantages, and all are available at fair market values. However, Microsoft remains a good choice that shows better potential for success.
Meta has traded at this valuation level previously, which indicates that investors still have time to wait and watch. On the other hand, Microsoft usually requires customers to pay extra for its products, which makes the current market value seem like a temporary opportunity.
Hence, Microsoft represents the best value for AI investments at the moment and is a better AI buy, because its AI revenue currently exists and its future demand remains secured.
Bottom Line
AI stocks usually maintain their expensive price range, yet Meta and Microsoft demonstrate that market value still exists during periods of intense speculation. This gives investors an unusual opportunity, who want to achieve growth without paying excessive amounts, in order to purchase high-quality products at lower prices.
