Driven by memory supply bottlenecks and upcoming hardware rollouts like the Vera Rubin chip architecture, these three technology stocks offer valuations that are cheap compared to their recent history.
Nvidia’s Valuation Disconnect and the Upcoming Vera Rubin Architecture
According to reports published by The Motley Fool and Webull, Nvidia is the king of AI investing. The company sells far more computing units than its competitors combined, maintaining its status as the industry-standard computing unit that AI firms use widely. Yet, a pricing anomaly has emerged.
While several of Nvidia’s peers trade at forward price-to-earnings (P/E) ratios in the mid-30s or higher, Nvidia is valued at 25 times forward earnings. Historically, Nvidia has traded at over 35 times forward earnings in the second half of the year. This valuation persists even as Wall Street analysts project 43% revenue growth next year, with earnings per share expected to climb from $9.00 to $12.89.
The hardware pipeline remains active. Nvidia is launching its latest chip architecture generation, Vera Rubin, at the end of the year. Data tracked via YCharts indicates that this hardware could support a rally of 30% or more to close out 2026.
Memory Bottlenecks Fuel Sandisk and Micron Growth
Memory chip production capacity is widely recognized as the current bottleneck. Both Sandisk and Micron Technology are capitalizing on supply shortages across the memory chip ecosystem.
Sandisk noted in its latest quarterly results that two-thirds of its 372% year-over-year growth came from price increases, while the other third came from rising output. Following a period of profit-taking by investors in the first half of 2026, both memory stocks have seen rallies in recent weeks.
Investors have been advised by Micron that supply constraints in the memory chip sector will persist until at least 2028, at which point additional manufacturing output will become available. This gives these stocks time to rally, particularly after 2027 capital expenditure projections get released.
Macro Capital Expenditures and the 2027 Outlook
The financial outlook for these three stocks relies on hyperscaler spending. According to guidance shared by Nvidia with its investors, data center capital expenditures are anticipated to exceed $1 trillion in 2027, marking an increase from the $650 billion projected for 2026.
- Nvidia (NVDA): Trading near $225.16 with a gross margin of 74.15% and a market cap of $5.4 trillion.
- Micron Technology (MU): Positioned to capture enterprise memory demand with capacity constraints stretching toward 2028.
- Sandisk (SNDK): Delivering 372% year-over-year growth fueled by price increases and rising output.
As AI hyperscalers increase capital expenditure guidance, conditions favoring these companies remain. For investors eyeing the final stretch of 2026, these three equities present an opportunity to take advantage of their relatively cheap valuations.
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