3 Tech Stocks Outperforming Nvidia With Better Valuations

The great Nvidia has had a rather lukewarm year by its own lofty standards, rising just north of 31% while comfortably topping the Nasdaq 100, which is up close to 20%. While NVDA shareholders aren’t complaining about market-beating gains, the big question is whether a new wave of AI demand could help propel next-generation GPU sales through the roof again. The hyperscalers are probably going to keep buying GPUs hand over fist, but with the rise of custom silicon solutions and potential for AI spending to backtrack, there are risks that could weigh more heavily on Nvidia versus other Magnificent Seven companies that have more of an earnings cushion.

As demonstrated in Monday’s trading session, even strong numbers can inspire selling when expectations become excessively optimistic. This represents the danger of chasing shares of AI firms that appear unstoppable. Even if the companies themselves continue advancing at full speed, there’s no guarantee their stock prices will follow, particularly when analysts err on the side of excessive optimism in their valuation models for high-growth AI companies. The consensus view on Wall Street now seems to be that we’re in an AI bubble facing imminent burst, making valuation and downside protection increasingly important considerations for investors.

What a year it’s been for memory chip maker Micron, which has surged 137% year-to-date, dramatically outperforming Nvidia’s 31% gain. With a still-attractive 27.2 times trailing price-to-earnings ratio, this AI beneficiary appears to have legs to run higher as it cashes in on the AI data center boom. The fundamental driver behind Micron’s impressive performance lies in the essential nature of high-performance memory for AI infrastructure—you simply cannot have high-performing data centers and AI systems without advanced memory solutions.

Citi analyst Christopher Danely believes DRAM could be the next source of strength for Micron, highlighting the company’s strategic positioning in the AI supply chain. As AI demand continues to drive requirements for more sophisticated memory solutions across data centers and edge computing applications, the path of least resistance for Micron appears to be higher. Until AI demand shows meaningful cooling, Micron’s combination of strong performance and reasonable valuation makes it an attractive alternative to more richly valued AI plays.

Lam Research represents another 2025 outperformer that’s starting to get noticed again, with the semi equipment maker posting 103% year-to-date gains. After what felt like a prolonged wait, Lam Research is finally beginning to feel the full force of the AI wave, though some analysts believe the company hasn’t yet reached its peak potential from the current cycle. The company’s position in the semiconductor equipment space gives it broad exposure to the entire industry’s expansion, not just specific AI chip manufacturers.

With robust AI momentum and a wave of analyst price target hikes now in the books, Lam Research appears well-positioned for continued strength. Deutsche Bank analyst Melissa Werathers has pointed to both “cyclical and structural tailwinds” supporting the company’s outlook. As semiconductor manufacturers ramp up production to meet exploding AI demand, equipment providers like Lam Research stand to benefit from the increased capital expenditures across the industry, making it a compelling play on the broader AI infrastructure build-out.

Like Micron and Lam Research, Intel is making up for lost time with 89% gains year-to-date, thanks in part to strategic investments from the U.S. government as well as partnerships with other firms. This renewed confidence from both peers and government entities makes it difficult to maintain a bearish stance on the company as it aims to catch up in the AI race. Intel’s resurgence represents one of the more compelling turnaround stories in the semiconductor space, demonstrating that established players can adapt to new technological paradigms.

Looking ahead to 2026, Intel plans to launch a new AI data center chip named Crescent Island, which could help close the competitive gap with its rivals. This development, combined with the company’s existing manufacturing capabilities and recent strategic repositioning, suggests Intel has meaningful potential to continue outperforming Nvidia in the coming year. The combination of government support, renewed strategic focus, and specific product development targeting the AI data center market positions Intel as a credible alternative for investors seeking AI exposure without Nvidia’s valuation premium.

The current AI landscape presents investors with a classic growth versus value dilemma. While Nvidia remains the undisputed king of AI, its significant run-up and high expectations create vulnerability to any disappointment. The recent job cuts at Meta Platforms’ AI division—600 positions eliminated—serve as a reminder that AI spending isn’t guaranteed to continue at current breakneck pace indefinitely. Such developments might not give AI traders confidence about where corporate spending might head next.

Investors may wish to maintain exposure to AI stocks but become more selective about the prices they pay and the downside risks they assume. The danger emerges when fantastic quarterly performances no longer suffice against what now feel like very lofty analyst expectations. Micron, Lam Research, and Intel offer investors alternative pathways to participate in the AI boom while potentially providing better protection should the AI trade experience a correction. Their more reasonable valuations, combined with strong fundamental positioning in the AI ecosystem, create compelling risk-reward profiles that merit consideration alongside more established AI leaders.