Why These Two Tech Giants Offer a Reasonable Entry Point for AI-Driven Growth

The AI Market Is Just Getting Started

The current bull market has delivered impressive returns, with the S&P 500 on track for double-digit annual gains heading into its third year. History suggests momentum could persist, but savvy investors are already looking ahead. The real opportunity lies in artificial intelligence stocks, which stand to dominate not just today’s market but future cycles as well.

Analysts project the AI market will expand dramatically—from roughly $300 billion today to somewhere between $1 and $2 trillion by the early 2030s. That kind of growth potential is hard to ignore. The question isn’t whether to invest in AI, but which players offer the best value right now.

Meta Platforms: A Cheaply Valued AI Contender

Among the Magnificent Seven tech stocks that have powered recent market gains, Meta Platforms (NASDAQ: META) stands out as offering the most reasonable valuation. Trading at just 26x forward earnings—down from 30x earlier this year—the stock presents a compelling entry point for long-term investors.

What makes Meta particularly interesting is its aggressive pivot toward AI. The company has developed Llama, a large language model now being deployed across its ecosystem. This isn’t just academic research; Meta is putting AI directly to work in its core business: advertising.

Consider Meta’s position: it operates Facebook and Instagram, platforms where billions of advertisers already spend money to reach consumers. Now imagine those advertisers seeing measurably better returns from AI-optimized campaigns. They’ll naturally increase spending, driving revenue higher. Meta’s substantial earnings base gives it both the financial firepower to invest heavily in AI infrastructure and the ability to return capital to shareholders through dividends—a rare combination.

The company’s track record on return on invested capital suggests past bets have paid off. If Meta can replicate that success with AI, it could emerge as a major beneficiary of this technology wave.

Alphabet: Search Dominance Meets AI Innovation

Alphabet (NASDAQ: GOOG) follows a similar playbook but operates from different strengths. Like Meta, it commands a profitable, defensible business—but Alphabet’s moat is Google Search, which dominates the market by a wide margin.

This search engine isn’t just useful; it’s essential. Advertisers flock to Google’s platform because they know consumers will find them there. That translated into Alphabet’s historic achievement: its first-ever $100 billion quarter. Google Search remains the company’s revenue engine, but Alphabet has successfully diversified with Google Cloud, which now serves enterprises with an expanding suite of offerings—including AI-powered solutions.

Alphabet developed its own LLM called Gemini and is already generating growth from AI within its existing customer base. As the AI market expands, this existing infrastructure positions the company to scale revenue faster than competitors.

The chart of Alphabet’s valuation tells a similar story to Meta’s. At 29x forward earnings, the stock offers a reasonable valuation for a company generating substantial cash flows and positioned to benefit from secular AI growth trends.

Two Undervalued Tech Giants Ready for the Next Wave

Both Meta and Alphabet represent compelling opportunities because they combine three qualities: established, profitable business models; clear pathways to monetize AI; and valuations that don’t yet fully reflect their AI potential.

The AI bull case isn’t speculative. Both companies are already deploying large language models, generating revenue from them, and investing heavily in the infrastructure needed to scale. As the industry matures and adoption accelerates over the next decade, these two tech leaders—both trading at reasonable multiples—stand a strong chance of leading the next market surge.

Investors considering exposure to the AI opportunity would be wise to examine both companies carefully. Their valuations, scale, and technological progress suggest they could drive significant returns in the coming years.