Key Points
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Microsoft is doing incredibly well, yet its stock is off its highs.
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There are years of AI chip spending ahead that will keep boosting Nvidia’s business.
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Broadcom is a viable competitor to Nvidia in the AI chip space.
- 10 stocks we like better than Microsoft ›
Finding and identifying unstoppable stocks is a smart investment strategy. These are the stocks that are positioned to deliver incredible returns over the long run because they are participating in a huge market trend. There is no bigger investment opportunity than AI right now, and I think the best ways to invest in it in March would be to buy Nvidia (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), and Broadcom (NASDAQ: AVGO).
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Microsoft
Microsoft’s stock has been on a downward trend over the past few months, but that momentum could turn around in March. There’s really nothing wrong with Microsoft’s business. Although some may take issue with how much money it is spending on its data centers, it’s still less than other hyperscalers are laying out. Furthermore, it is using a lot of its cloud computing capacity to host its clients’ models. That adds to Microsoft’s top line.
The tech giant posted solid results for its fiscal 2026 Q2, which ended Dec. 31, as revenue rose 17% year over year. Wall Street analysts’ consensus expectation is that Microsoft will finish out the year strong, with 16% growth in Q3 and 15% growth in Q4. Despite this, Microsoft is trading at a price-to-earnings ratio that it has rarely been lower than since 2020.
MSFT PE Ratio data by YCharts.
When Microsoft was last this cheap in late 2022, everyone assumed the U.S. economy was heading into a recession, and stocks sold off as a result. That’s not the case right now, yet the stock can be purchased at a similar valuation. This doesn’t make a lot of sense to me, which is why now looks like a great time to scoop up Microsoft shares.
Nvidia
Nvidia has been a leading supplier of the AI buildout since it began in 2023, yet right now, it is trading at a forward price-to-earnings ratio that’s close tp the cheapest it has traded at during that run.
NVDA PE Ratio (Forward) data by YCharts.
At 22 times forward earnings, Nvidia stock actually looks cheap. It’s still growing its top line rapidly (management expects 77% growth in Q1), yet the stock trades at a lower level than many of its big tech peers.
While some may be concerned that an AI bubble has formed, many of the big tech companies are already taking actions that will require them to purchase large quantities of computing hardware through 2030. That long runway for Nvidia gives me confidence that right now is an excellent time to buy its stock, as the AI party is just getting started.
Broadcom
Broadcom’s custom AI chips are among the most obvious rivals to Nvidia’s offerings. Instead of making broad-purpose graphics processing units (GPUs) like Nvidia does, Broadcom partners directly with AI hyperscalers to design chips specifically tailored for the AI workloads that they expect to run. While these application-specific integrated circuits (ASICs) aren’t as flexible as GPUs, they can provide incredible results at lower costs.
Broadcom’s ASICs won’t replace Nvidia GPUs, but they can serve as great alternative sources of processing power for some AI workloads. Demand has been strong for these custom chips: Broadcom’s AI semiconductor revenue rose by an incredible 106% year over year during its fiscal 2026 Q1, which ended Feb. 1.
Broadcom expects that rapid growth will continue throughout the year, making it an excellent stock to consider investing in now. While it isn’t nearly as cheap as its peers — trading at 32 times forward earnings — investors who buy in now are paying up for what could be a true Nvidia competitor. There aren’t many other companies meaningfully challenging Nvidia’s AI chip dominance, so this, in and of itself, is a reason to consider investing in Broadcom’s stock.
Should you buy stock in Microsoft right now?
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Keithen Drury has positions in Broadcom, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
