While Market Panics - I'm Buying 3 AI Stocks NOW Before Earnings Blow Up the Market!

In this video, I will discuss three of the most controversial stocks in the market right now. Nearly 90% of analysts rate them buy or strong buy. Yet, their price targets vary widely. Some believe these stocks are extremely undervalued and offer enormous growth potential, while others argue that they have entered bubble territory. In this video, my objective is to examine the evidence and determine whether these companies are genuinely undervalued. To determine whether a company is genuinely undervalued, examine its revenue and earnings forecast, industry trends, management commentary, forward guidance, and valuation multiples. I will also compare its growth, profitability, and financial strength with major competitors to determine whether the market is overlooking a genuine opportunity or correctly pricing the risks. As always, I want to remain fully transparent with my viewers. Here are the stocks I have covered so far and how each one has performed. Pause the video here if you would like to review the performance of these stock in detail. Please note that although I hold a master's degree with a specialization in finance, I'm not a certified financial analyst. These videos are for information and entertainment purposes only. Please conduct your own due diligence before making any investment decision. Now, let's get to the main part. The first stock is Micron, which has become a major battleground stock between bulls and bears. Starting with the forecast, more than 30 Wall Street analysts expect Micron to earn 73.39 in fiscal 2026, representing 785% growth. Consensus EPS then rises 100% to nearly 155 in 2027 and reaches approximately 168 in 2028. Revenue growth is equally powerful, reaching 167% over the past year, with forward growth estimated at 112%. The industry outlooks force these forecasts. Hyperscaler capital spending is expected to increase substantially in 2027, creating additional demand for AI infrastructure and memory. Producing high-bandwidth memory also consumes approximately three times the manufacturing capacity of a conventional memory, which further restricts overall DRAM supply. Management expects the memory shortage to become even more severe in 2027 because demand is growing faster than new factories can be built. Micron has also secured legally binding five-year strategic customer agreements through 2030. These contracts include committed purchase volumes and customer prepayments, giving Micron greater revenue visibility than during previous memory cycles. Now, consider the valuation. Micron trades at 11.8 times expected first-year earnings, falling to 5.6 times in the second year, and 5.1 times in the third year. Western Digital and Seagate trade at considerably higher forward multiples, although SanDisk is slightly cheaper. Micron's growth is equally impressive. Forward revenue growth is projected at 112% compared with approximately 40% for Western Digital and Seagate and 99% for SanDisk. Its expected EPS growth of 392% also leads the group. Profitability strengthens the argument further. Micron's gross margin stands at 72.6%, while its 65.7% EBIT margin and 75.6% EBITDA margin are the highest among these peers. The combination of rapid growth, strong profitability, and a low forward valuation makes Micron particularly compelling. The main weakness is cash conversion. Micron's levered free cash flow margin is only 8.5% reflecting the enormous cost of expanding manufacturing capacity. Memory cyclicality, Chinese competition, and dependence on continued AI spending remain important risks. However, Wall Street's average price target of 1500 implies almost 73% upside based on its forecast industry position, management outlook, and peer comparison. Micron appears generally undervalued rather than simply cheap for a valid reason. Second stock is Nvidia. To determine whether it is generally undervalued, let us begin with its revenue and earnings forecast. For fiscal 2027, 50 analysts expect earnings of approximately nine per share representing growth of nearly 89%. Consensus EPS then rises 43% to 12.89 in 2028 and another 24% to 16.04 in 2029. Revenue follows the same pattern. Analysts expect approximately 394 billion in 2027, 562 billion in 2028, and 690 billion in 2029. Growth is expected to moderate gradually, but the business is not projected to stop expanding. More importantly, Nvidia becomes cheaper as its earnings increase. The stock trades nearly 24 times projected 2027 earnings, falling to 17 times in 2028 and 13.6 times in 2029. For a company expected to generate this level of growth, those forward multiples appear cheap. The industry outlook also remains supportive. Nvidia recently partnered with Apollo, BlackRock Blackstone Brookfield Goldman Sachs, and KKR to create financing platforms that could mobilize more than 500 billion for AI infrastructure. Nvidia is not investing the entire amount itself. These platforms are designed to help customers finance Nvidia-powered data centers. If successful, they could expand demand beyond hyperscalers and make AI computing accessible to cloud providers, enterprises, and other infrastructure operators. The upcoming earnings report must confirm that demand is broadening beyond a small number of tech giants. I will be watching enterprise and AI cloud demand, customer financing quality, and management's forward guidance. The Blackwell to Rubin transition provides another potential catalyst. Rubin promises up to 10-fold reduction in inference costs. Cheaper computing could encourage wider adoption of AI agents, but workload growth must exceed efficiency improvements for infrastructure spending to continue accelerating. Wall Street's average price target is $302, implying approximately 39% upside. Targets range from 180 to 500, demonstrating significant disagreement about Nvidia's future. The main risks are power shortages, excessive lines on hyperscalers, aggressive financing guarantees, and a broader market downturn. My verdict is that Nvidia is undervalued. Nvidia's CUDA ecosystem, earnings forecast, and expanding infrastructure financing network support continued growth. However, investors should expect steady long-term compounding rather than assuming that another explosive valuation expansion is granted. The third stock is TSMC, the company responsible for manufacturing many of the world's most advanced processors. To determine whether it's genuinely undervalued, let us begin with its latest growth numbers. Second-quarter revenue reached 40.2 billion, increasing 36% in local currency and 33.7% in US dollars. Growth was broad across every major platform, but high-performance computing led the business with a 66% year-over-year increase. This confirms the demand for AI processors and advanced computing remains exceptionally strong. TSMC's 2-nanometer technology also started generating meaningful revenue during the quarter. It represented only 3% of wafer revenue, but management expects its contribution to increase over the coming quarters. Overall, technologies at 7 nanometer or below generated 77% of wafer revenue compared with 74% 1 year earlier. Profitability improved alongside growth. Gross margins expanded by 9.1 percentage points, while operating margin increased by 10.7 percentage points. Earnings per share rose 77.4%. These numbers demonstrate strong pricing power and disciplined cost control. Management's forward guidance remains equally encouraging. Third quarter revenue is expected between 44.6 billion and 45.8 billion. At the midpoint, that implies growth of approximately 36.6%. Gross margin is expected between 65% and 67%, while operating margin should remain between 56% and 58%. Industry trends also support the outlook. TSMC plans to construct three additional advanced packaging facilities in Taiwan. It has also increased its planned US investment by 100 billion, taking its total expected commitment to approximately 265 billion. These investments indicate that management expects AI infrastructure demand durable. The balance sheet appears strong with a current ratio of 2.5 and declining debt relative to equity. However, receivables days increased to 29 and inventory days reached 87, which require monitoring. Valuations remain attractive. TSMC trades near 23.5 times forward earnings on their small premium to the technology sector, but forward PE ratio drops to just 15 in next 2 years and it's extremely cheap for a company experiencing monster growth. Its forward PEG ratio is approximately 0.68, a 46% sector discount after accounting for expected growth. The risks include enormous expansion costs, geopolitical uncertainty, and potential equipment price increases from ASML. Nevertheless, accelerating revenue, expanding margins, advanced node leadership, and a reasonable valuation support my buy rating.