Ah, the Warren Buffett indicator—picture it as the market's built-in smoke detector, beeping wildly because stock values are outpacing the economy like a kid on a sugar rush. With AI darlings like Nvidia and pals inflating the S&P to record heights, it's easy to feel like we're all guests at a party that's one balloon pop away from deflation. But here's the intriguing twist: even in this frothy brew, there are AI-related stocks sipping quietly in the corner, looking undervalued and ready for a real conversation.
Take Micron Technology, the memory chip maestro riding the AI data center wave. Sure, its business has a history of boom-and-bust cycles that could give whiplash to even the steeliest investor—demand surges, profits balloon, then poof, it's back to slim pickings. But what if this time, AI's insatiable hunger for high-bandwidth memory (think super-fast RAM for powering those massive AI brains) flips the script? With HBM chips booked solid through 2026 and data centers eyeing power needs rivaling entire countries, Micron isn't just surfing a wave; it's building the board. Trading at under 12 times forward earnings, it's like finding a Ferrari at sticker price—tempting, but remember, no one's handing out guarantees in the chip game. Pragmatically, if you're betting on AI's long haul, this could be your low-risk entry to the infrastructure boom.
Then there's Duolingo, the gamified language app that's sneakily turning AI into your pocket tutor. Not your typical silicon valley behemoth, but hey, who says innovation can't come with a side of owl memes? Only 8% of users pay up, yet that's driving 84% of revenue—classic freemium magic. AI-powered features like live chats are boosting subscriptions by leaps (46% growth last quarter? Not shabby), proving that smarts can convert free riders into paying fans. At 18 times sales and down 40% from peaks, it's no screaming bargain, but if Duolingo keeps blending AI with sticky engagement, it'll look like one in retrospect. Humorously, while others chase world domination through chatbots, Duolingo's quietly conquering conjugations—proof that AI wins when it's useful, not just flashy.
Super Micro Computer rounds out the trio as the underdog server builder, promising 50%+ growth while trading at a modest 22 times forward earnings. The catch? Margins are squeezing like a budget airline seat, raising eyebrows about scalability. Yet, in the AI data center frenzy, their kit is the unsung hero keeping the lights on (literally). Management's betting on a margin rebound as they scale—plausible, if execution holds. It's the classic high-growth puzzle: growth alone can pay off, but improving profits? That's the jackpot. Think of it as investing in the AI kitchen where the real cooking happens, not the celebrity chef.
Overall, this bubble chatter is a healthy nudge to pause the FOMO and scrutinize. AI's transformative, no doubt—powering everything from chatty apps to colossal compute farms—but valuations matter. These picks highlight that innovation thrives not just in hype, but in steady builders. So, dear readers, grab your pragmatic glasses: is the emperor overdressed, or are there gems worth polishing? Dive in critically, and maybe you'll snag a winner before the market's next plot twist. Source: Investors Fear a Bubble, but These Artificial Intelligence (AI) Stocks Could Still Be Bargains
