The five major valuation hotspots in the AI industry chain in 2026: undervalued AI stocks from chips to cloud services

While the market is fervently chasing star AI concept stocks, some key players in the industry chain are being mispriced. During the AI boom cycle of 2026, these five AI stocks stand out as rational investment targets due to their reasonable valuations, strong growth expectations, and market recognition. They cover the entire AI ecosystem from chip manufacturing to cloud services, with each company occupying an irreplaceable strategic position in its field.

Chip Foundries and Memory: The Hardware Foundation of AI Servers

The core competition in the AI era is computational power, which depends on two critical links: chip manufacturing and storage.

TSMC: The Only Choice for Global Chip Foundry

In the division of labor for AI chip design and manufacturing, TSMC acts as the “factory.” Nearly every mainstream AI chip—from Nvidia’s AI processors to Apple’s self-developed chips and AMD’s high-performance products—is produced on TSMC’s manufacturing lines. This monopoly position creates a significant moat.

By 2026, TSMC is expected to achieve an annual revenue growth rate of about 30%. Goldman Sachs maintains a buy rating and projects a potential upside of 40-45%, reflecting institutional investors’ view that the stock is undervalued. Currently, consensus among analysts includes 10 buy ratings, 2 hold, and none sell. Such a strong positive outlook is rare for a company with a market capitalization reaching hundreds of billions of dollars.

Micron: The Hidden Champion of Memory Chips

If TSMC is the “foundry” for chips, Micron is the “memory hub” for AI servers. Micron produces DRAM and high-bandwidth memory (HBM) chips, which work alongside AI processors during machine learning tasks and are essential components of AI computing.

Surprisingly, despite expecting over 50% revenue growth in fiscal 2026, Micron’s valuation remains in the single-digit forward P/E range. This makes it the cheapest among companies in the S&P 500 with year-over-year earnings growth. 29 analysts rate it as a buy or strong buy, with only 3 holding and none selling. The average target price is close to $295, implying significant upside potential.

As AI workloads continue to grow, the supply of high-end memory remains tight, giving Micron pricing power. Market expectations suggest this supply constraint will support the stock price through the end of 2026.

The Rise of Edge AI Chips: New Opportunities in Mobile and Automotive Devices

Not all AI applications require cloud processing. Qualcomm’s strategic focus on Snapdragon processors is transforming the “edge AI” industry landscape.

Qualcomm: Bringing AI to Consumers’ Pockets

Unlike chipmakers focused on data centers, Qualcomm’s core strategy is deploying AI functions in mobile devices and connected cars. Snapdragon processors power smartphones, laptops, automotive systems, and IoT devices. This means AI is no longer just a cloud luxury but a feature integrated into everyday consumer devices.

Qualcomm’s P/E ratio remains significantly lower than most AI-focused competitors. Compared to similarly growth-oriented companies, its valuation appears more attractive. With new AI-enabled smartphones launching by 2026 and automakers integrating more AI features into vehicle systems, Qualcomm’s earnings are expected to accelerate. 16 analysts cover the stock, with about 25% rated as strong buy and 31% as buy. Despite a recent analyst downgrade, the overall consensus remains in the buy or moderate buy range.

The Nervous System of AI Infrastructure: High-Speed Networks and Accelerators

When thousands of AI processors in data centers need to work together, the network infrastructure connecting them becomes a new bottleneck.

Marvell: The Network Lifeline of Large-Scale Data Centers

Marvell supplies high-speed networking equipment and customized accelerator chips, which are critical for building AI compute clusters in large-scale data centers. As companies expand AI system scale, demand for network capacity grows exponentially. Marvell’s products connect thousands of processors working in concert on AI tasks, handling massive data flows.

According to Zacks Research, Marvell’s revenue is projected to grow 42% in fiscal 2026, with profit growth reaching 80%. This profit growth outpaces revenue, reflecting high value-added products and operational leverage. MarketBeat shows 4 analysts give a strong buy, 22 buy, and 12 hold, with an overall moderate buy consensus and no sells. The average target price is around $115, indicating significant upside potential relative to current prices.

Note that Marvell’s stock volatility is higher than that of large tech giants, offering more risk-tolerant investors a direct channel into AI infrastructure development.

Global Disparities in Cloud Computing and AI Services: Valuation and Growth Asymmetry

Different regions have varying levels of AI market maturity, leading to divergent valuation environments.

Alibaba: The Valuation Gap in China’s AI Cloud Services

While Alibaba is widely recognized for its e-commerce business, its cloud computing division is becoming a core growth engine. This division offers AI-enabled cloud services and large language models, directly competing with Western platforms like AWS and Microsoft Azure.

Alibaba’s valuation is significantly lower than comparable Western tech firms. This reflects market concerns over China’s regulatory environment and economic outlook. However, fundamentally, Alibaba maintains a strong balance sheet and ample cash reserves.

MarketBeat data shows 17 buy ratings, 3 hold, and 1 sell. Despite occasional downgrades, the overall consensus remains positive. The target price exceeds $100, indicating upside potential from current levels. Compared to peers, Alibaba’s earnings multiples are relatively low. More importantly, AI-driven cloud revenue growth surpasses that of traditional e-commerce, injecting new growth momentum beyond retail.

Why These AI Stocks Are Worth Watching in 2026

The investment logic in AI has shifted from “concept hype” to “industry application.” These five AI stocks represent the complete value chain—from upstream chip manufacturing to midstream foundry services and downstream applications. Their shared characteristics are:

First, Reasonable Valuations. Compared to competitors with similar AI growth prospects, these companies offer more cost-effective trading prices, leaving room for risk buffers.

Second, Clear Growth Expectations. Revenue growth in fiscal 2026 ranges from 30% to 50%, with even higher profit growth, based on order visibility and capacity planning rather than pure speculation.

Third, Strong Analyst Consensus. Despite tech stock volatility, these five companies have significantly more buy or hold ratings than sell or neutral, reflecting widespread institutional optimism.

Finally, Strategic Positioning. Whether in foundry, memory, chip design, network infrastructure, or cloud services, these companies hold irreplaceable positions with high customer stickiness and competitive moats.

The 2026 AI investment opportunity isn’t about chasing already soaring star stocks but understanding each link in the industry chain and identifying those key players that are structurally undervalued. These five AI stocks exemplify such opportunities.