Technology stocks have helped lead the market higher over the past couple of years. While many of these tech stocks have run up in value (and in valuation), there are still some stocks that remain attractively priced when considering their future potential for growth.
Let’s look at two bargain tech stocks in particular that appear to be ready for (or to maintain) a bull run.
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1. Nvidia
Despite the stock’s incredible performance over the past several years, Nvidia‘s (NASDAQ: NVDA) stock remains attractively valued, trading at a forward price-to-earnings (P/E) ratio of under 24 times 2025 analyst estimates and a price/earnings-to-growth (PEG) ratio of under 0.5 (PEG ratios of below 1 considered undervalued).
The company is the market share leader in graphic processing units (GPUs) with an approximate 90% market share. GPUs, meanwhile, have become the backbone of artificial intelligence (AI) infrastructure due to their superior processing speeds that are needed to train large language models (LLMs) and run AI inference.
Nvidia created a wide moat in the GPU space with the help of its CUDA software platform, which it developed many years ago to allow customers to program its chips for applications beyond their original purpose of speeding up graphics rendering in video games. This led to developers learning to program GPUs using CUDA, making it the industry standard.
Meanwhile, in the years since, the company has expanded its software edge through CUDA X, which includes a collection of microservices, libraries, tools, and technologies designed for AI and high-performance computing.
While rival Advanced Micro Devices also designs GPUs, it is a distant second, largely due to Nvidia’s superior software platform. In a detailed test, independent semiconductor research company SemiAnalysis said that AMD’s GPUs were “not usable” for AI training out of the box and that it needed considerable help from the company to patch software bugs. Meanwhile, it said Nvidia continues to widen its CUDA moat with “new features, libraries, and performance updates.”
As such, Nvidia remains the best-positioned company to benefit from increased AI infrastructure spending, which is set to continue to soar this year. The big three cloud computing companies — Amazon, Microsoft, and Alphabet — have announced over $250 billion in planned capital expenditures (capex) combined in 2025, largely on AI infrastructure, while Meta Platforms will spend an additional $60 billion to $65 billion. Meanwhile, Amazon said that any reduction in inference per unit costs would likely just lead to more overall AI infrastructure spending.
With AI infrastructure spending continuing to ramp up and the stock trading at an attractive valuation, Nvidia looks poised for a bull run.
Image source: Getty Images.
2. Alibaba
While DeepSeek brought a spotlight to China’s progress in AI, Alibaba (NYSE: BABA) is one of the big leaders in the AI space among Chinese companies. Meanwhile, the stock is very cheap, trading at a forward P/E of only 11.5 times 2025 analyst estimates and a PEG ratio under 0.3. Alibaba also has around $50 billion in net cash on its balance sheet as well, which is nearly 20% of its market cap.
Late last month, Alibaba introduced its latest Qwen 2.5-Max LLM, which it says not only outperforms DeepSeek across the board, but also models from OpenAI and Meta Platforms. Alibaba, meanwhile, has been at the forefront of offering open-source AI models for very specific purposes, such as language, audio, vision, coding, and mathematics based off its foundational Qwen model.
Alibaba was praised by Citron Research, a research company known more for short-selling, which said Alibaba’s Qwen models have been ahead of the curve for the past six months. It added that Qwen’s enterprise applications will help China catch up in business software, an area where the country has greatly trailed the West.
Meanwhile, the company’s cloud computing unit has been seeing strong profitability growth as it benefits from AI while letting low-margin project-based contracts roll off. Last quarter, its cloud revenue climbed 7% to $4.2 billion, but the segment’s adjusted earnings before interest, taxes, and amortization (EBITA) soared 89% to $379 million. It noted that AI-related revenue surged by triple digits.
Continuing its AI momentum, the company recently announced it will partner with Apple to power Apple Intelligence in China. The two companies have submitted co-developed AI features for regulatory approval. Apple had apparently tried to partner with other Chinese companies, including Baidu, Tencent, and TikTok owner ByteDance, but Alibaba’s model proved to be the best fit, while Baidu’s model, its original first choice, did not meet its standards.
Apple is hoping to bring Apple Intelligence to China soon with a future operating system (iOS) update. The iPhone has fallen behind in China due to competition from local competitors, as well as having no AI-approved features. It hopes bringing Apple Intelligence to China will help boost sales in the country.
As China continues to make strides in AI and investors look to invest in Chinese AI companies, Alibaba will be in a great spot for a bull run.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Geoffrey Seiler has positions in Alibaba Group and Alphabet. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Baidu, Meta Platforms, Microsoft, Nvidia, and Tencent. The Motley Fool recommends Alibaba Group and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.