TLDR
- Alphabet (Google) trades at a P/E ratio of 27, below the S&P 500 average of 32, despite a 50% stock increase this year
- Meta Platforms has 3.5 billion daily users across its apps and plans to invest $70-72 billion in capital expenditures for AI development
- Micron Technology is the only U.S. manufacturer of high-bandwidth memory (HBM) chips and has seen 49% revenue growth in fiscal 2025
- Google Cloud now represents 14% of Alphabet’s revenue, up from 12% the previous year, showing growth beyond search
- Meta’s net income fell 9% in the first three quarters of 2025 due to rising income tax expenses despite 27% operating income growth
The tech stock rally has been selective. While companies like Palantir and IonQ have seen valuations soar, many established tech firms remain attractively priced. Three major tech companies with AI initiatives trade at reasonable valuations compared to the broader market.
Alphabet Trades Below Market Average
Alphabet currently trades at 27 times earnings, below the S&P 500 average of 32. The stock has risen 50% this year. The company plans to spend $91 billion to $93 billion on capital expenditures in 2025.
Alphabet Inc., GOOGL
Google Cloud has become a key growth driver. The division now makes up 14% of company revenue in the first three quarters of 2025. This is up from 12% in the previous year.
The autonomous driving platform Waymo is gaining traction. The service has expanded its operations across multiple cities. This diversification provides revenue options beyond traditional search advertising.
Meta Platforms Invests in AI Infrastructure
Meta Platforms trades at 28 times earnings with over 3.5 billion daily users. The company operates Facebook, Instagram, and WhatsApp. These platforms reach about 43% of the global population.
Meta Platforms, Inc., META
Digital advertising revenue grew 22% in the first three quarters of 2025. This segment still accounts for 98% of Meta’s total revenue. The company is investing $70 billion to $72 billion in capital expenditures this year.
Net income dropped 9% in the first three quarters of 2025. Rising income tax expenses offset a 27% increase in operating income. The stock has gained about 10% this year.
Meta is using data from its billions of users to train AI models. The company is working to integrate AI tools across its platforms. These investments are focused on supporting the digital advertising business.
Micron Benefits from Memory Chip Demand
Micron Technology has transformed from a cyclical stock to a growth story. The company designs memory chips for various applications. AI development has created demand for specialized memory products.
Micron is the only U.S. manufacturer of high-bandwidth memory chips. Only three companies globally produce HBM chips. These components are essential for AI accelerators.
Revenue grew 49% in fiscal 2025, which ended August 28. Net income increased by 11 times during the same period. The stock has risen 125% this year.
Micron trades at 30 times trailing earnings. The forward P/E ratio is just 13. This lower forward multiple reflects expected earnings growth from continued AI chip demand.
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