2 Tech Stocks to Buy Instead

Actions in Microsoft (NASDAQ:MSFT) have soared 25% over the past year as investors have become optimistic about the company’s powerful position in technology and its growing artificial intelligence (AI) business. Growth saw Microsoft overtake Apple as the most valuable company in the world, reaching a market capitalization in excess of $3 trillion.

As the home of Windows, Office, Xbox, Azure and LinkedIn, Microsoft has amassed a sizable user base and has a powerful grip on technology. However, the stock’s recent growth has made it a slightly expensive option compared to other stocks.

The charts above show that Microsoft has a higher forward price-to-earnings (P/E) ratio and forward price-to-sales (P/S) ratio than Microsoft. Intel (NASDAQ:INTC) And Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG), two technology companies with solid prospects. The numbers suggest that Microsoft shares offer the least value among the three companies.

At the same time, recent developments indicate that Intel and Alphabet could have the same, if not more, growth potential in the coming years as the Windows company. So consider buying these two tech stocks instead.

1.Intel

Intel hasn’t inspired much investor confidence recently, with its shares down 47% since 2021. The tech giant has faced numerous headwinds, including a global chip shortage, a market slowdown which curbed consumer spending, increased competition which threatened its market share. in central processing units (CPUs) and the end of a lucrative partnership with Apple.

However, recent developments indicate that Intel is starting to turn things around and it could be worth investing in the company as it begins its restructuring.

In 2023, the chipmaker announced a complete overhaul of its business model, moving to a foundry-focused business. The move will see Intel take on organizations like Semiconductor manufacturing in Taiwan and become one of the world’s leading chipmakers. Intel plans to build at least four chip factories in the United States for now, with recent reports showing construction is progressing on schedule for two sites that began in 2022.

Focusing on manufacturing strengthens Intel’s long-term prospects as increased interest in AI has led to skyrocketing demand for chips. While rivals love Nvidia And Advanced microsystems specializes in chip design, Intel has the unique opportunity to take advantage of the AI ​​boom by becoming the essential manufacturer for companies in the field of AI.

It will take time to complete construction of its facilities and get a return on its heavy investment, but Intel could see a significant increase in profits from its move to a foundry model.

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This chart shows that Intel’s earnings are expected to reach nearly $3 per share over the next two fiscal years. By multiplying this figure by the company’s forward P/E of 27 gives a stock price of just over $70, projecting stock growth of 133% through fiscal 2026.

Of course, it is crucial to remember that these…