3 Tech Stocks to Consider for Smart Investment

The stock market is experiencing a boom, especially within the technology sector. Yet, there are still investment opportunities that are well-priced, even for those with smaller budgets. Below are three tech stocks demonstrating significant growth while also offering appealing valuations.

Investing Wisely: A $3,000 Strategy

If you have $3,000 set aside for investment and don’t need it for daily expenses, an emergency fund, or tackling short-term debt, these tech stocks could be worth examining.

Where should you invest $1,000 today? Our analysts have identified the 10 best stocks available now. Check out the 10 stocks »

1. Nvidia

Nvidia (NASDAQ: NVDA) has been a standout performer in the stock market for several years. Currently, the stock’s forward price-to-earnings (P/E) ratio sits at around 31 based on estimates for next year (ending January 2026), with a price/earnings-to-growth ratio (PEG) just below 1. A PEG under 1 generally suggests that a stock is undervalued, particularly for growth stocks that usually see higher PEGs.

Nvidia has demonstrated remarkable revenue expansion, with projections indicating triple-digit percentage growth again in 2024. In Q3, their revenue surged 94% year over year. Analysts expect over 50% revenue growth for 2025.

The company’s success largely arises from its dominance in graphic processing units (GPUs), essential for artificial intelligence (AI) operations, boasting a 90% market share attributed to its CUDA software platform. This platform helps developers program GPUs for various applications and has expanded into a suite of AI tools and services.

Demand for GPUs shows no signs of waning, as AI technologies require much more computing power. Companies, including Microsoft, are investing heavily in AI infrastructure, with Microsoft planning to allocate $80 billion for AI-powered data centers this year.

This persistent demand paired with Nvidia’s attractive valuation makes it an excellent buy.

Image source: Getty Images.

2. Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing (NYSE: TSM), known as TSMC, is thriving along with the AI infrastructure trend. Its stock is notably valued with a forward P/E of 23.5, and an impressive PEG of 0.33.

TSMC leads the global semiconductor industry, producing chips for major companies like Nvidia, Apple, and Broadcom. It has garnered a strong market position due to its technological prowess and large production capabilities, giving it significant pricing power and enhancing its profit margins. In the last quarter, the company reported a revenue increase of 37% and improved gross margins by 600 basis points year over year, reaching 59%.

Given its competitive edge and ongoing demand for AI chips, TSMC presents itself as an attractive investment option.

3. Alphabet

While Nvidia and TSMC benefit from the buildout of AI infrastructure, Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is also enhancing its data center infrastructure to support its cloud computing service, Google Cloud. It is one of the more affordably priced large-cap AI stocks, currently trading at a forward P/E of just over 19, based on 2025 estimates.

Recently, Google Cloud’s revenue soared 35%, and its operating income jumped significantly from $266 million to $1.95 billion, indicating that it has reached a profitable stage. The growth aligns with increasing demand from customers eager to use Google Cloud’s platform for their own AI applications.

In addition, Alphabet has developed a custom AI chip, enhancing efficiency and reducing processing time for AI tasks. Besides cloud services, Alphabet dominates digital advertising through Google and YouTube, the leading search engine and video streaming platform globally. The company is increasingly integrating AI into its search functionalities and rolling out innovative AI tools.

Alphabet also saw a 15% boost in overall revenue and a 37% increase in earnings per share in the last quarter, positioning it as a compelling investment opportunity.

Overall, with a reasonable valuation and a mix of established and emerging business segments, Alphabet stands out as a wise investment choice.

Don’t Miss This Potentially Profitable Opportunity

Have you ever felt you missed your chance to buy into top-performing stocks? Now is a good time to rethink that. Occasionally, our expert analysts identify a “Double Down” stock—a recommendation for a company they believe is about to surge. If you’re worried about missing out, investing now could prove beneficial. The numbers speak volumes:

• Nvidia: an investment of $1,000 at our 2009 recommendation would now be worth $381,355!*
• Apple: a $1,000 investment from 2008 could yield $42,390!*
• Netflix: if you had put in $1,000 in 2004, it would be worth $514,479!*

We are currently revealing “Double Down” alerts for three exceptional companies, and this may be a limited-time opportunity.

Learn more »

*Stock Advisor returns as of January 21, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and has specific options strategies involving Microsoft. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and may not reflect the views of Nasdaq, Inc.