The last two years have been dominated by artificial intelligence (AI) stocks. The influx of spending on AI infrastructure and development, combined with investors’ excitement around the potential for it to change multiple industries, pushed the prices of several companies’ stocks into astronomical territories. It may be hard to find a great company with a stock trading at a fair price for less than $200.

But there could be a lot of growth left when it comes to investing in AI. The market for AI hardware and software is expected to grow between 40% and 55% per year through 2027, according to analysts at Bain.

While many stocks already have those high expectations baked into the price, these three software and hardware makers all offer the chance to buy into their companies at good value. And the best part is that each stock trades for about $200, making them accessible to just about anyone interested in getting started with AI stocks.

1. Alphabet

Alphabet (GOOG -1.55%) (GOOGL -1.45%) is the company behind Google. While many expected advances in AI from competitors to cut into Google’s business, Alphabet’s management successfully incorporated AI into its core products.

The biggest change to search over the past year is the new AI overview. If you’ve typed a question into the Google search box in the last several months, you’ve probably seen AI-generated answers with links to its sources.

Management says the new feature is increasing engagement and satisfaction among users, as they find Google can answer more of their questions. Meanwhile, its advancements in AI over the last 18 months enabled it to reduce the cost of using generative AI to answer those queries by 90%, enabling it to roll out the feature around the world.

The company also uses its AI capabilities to offer new ways to search the web. One product, Circle to Search, allows users to circle words or images on a webpage while browsing on their Android smartphone and start a search. Google Lens makes searching the web as simple as taking a picture. Both increased valuable search types like product discovery and shopping.

Meanwhile, Google Cloud, Alphabet’s cloud computing division, saw its revenue grow substantially as developers tap its compute for generative AI applications. Not only has revenue grown over the last two years, but it’s also now producing meaningful operating profits for Alphabet. Google Cloud generated $1.9 billion in operating income last quarter, up from $270 million a year ago and a loss of $700 million in the third quarter of 2022.

Alphabet continues to innovate in AI. It launched the newest version of its large language model (Gemini 2.0) in December, along with AI agents built on the model to help with browser navigation and debugging computer code. Alphabet’s scale and distribution capabilities give it an advantage in developing and popularizing its AI-driven software.

With shares trading at $194 as of this writing, the stock looks like a great value. Despite analysts’ expectations of double-digit earnings growth for years to come, it trades for just 22 times 2025 earnings expectations. That’s a bargain compared to other AI stocks.

2. Qualcomm

Qualcomm (QCOM -0.81%) is best known for its wireless patents, which cover 3G, 4G, and 5G connectivity. Every smartphone maker pays a license to Qualcomm to use its patents. That extremely high-margin revenue has helped fuel Qualcomm’s innovation in chipmaking, and it’s unlikely to change any time soon.

Qualcomm makes chipsets for smartphones, ranging from simple baseband chips that allow phones to connect to a wireless network to the all-in-one Snapdragon line, which incorporates an application processor with a baseband or modem set. You can find a Snapdragon chip in most high-end Android phones.

So far, Qualcomm’s chips haven’t had much to do with AI. That’s starting to change, though. In 2024, Qualcomm introduced a line of Snapdragon processors designed for Windows PCs with the aim of running on-device AI inferences. Keeping AI processes on-device ensures user data remains private and allows users to take advantage of AI capabilities without an internet connection.

While the adoption of so-called “AI PCs” powered by Qualcomm’s chips has been slow, it seems more customers will likely demand on-device AI from their smartphones in the future. That requires higher-end processors, like Qualcomm’s Snapdragon. As a result, Qualcomm could end up taking more market share in smartphones over the next few years.

Meanwhile, Qualcomm also has a burgeoning automotive chip segment. As automotive computers become increasingly complex and reliant on fast on-device AI processing, Qualcomm could prove a valuable supplier for automakers over the next few years. At its investor day in November, management said it had $45 billion in design wins in its automotive pipeline. For reference, the segment generated $2.9 billion in revenue during fiscal 2024.

Qualcomm’s share price of less than $160 makes it a great way to play the future of on-device AI across smartphones and PCs, not to mention the massive potential in automotive. Analysts expect earnings growth of around 10% for each of the next two years, while shares trade for just 14 times forward earnings estimates. The potential for Qualcomm to expand its share across multiple devices makes it an appealing stock at this price.

3. Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company (TSM -0.70%), otherwise known as TSMC, is the largest chip manufacturer in the world. It contracts with the biggest chip designers, including Nvidia, Apple, and Broadcom to fabricate the most advanced AI chips on the market. It’s a dominant force, commanding over 60% of all spending for semiconductor foundries.

TSMC commands such a strong market share due to its advanced technological capabilities. Nvidia CEO Jensen Huang praised TSMC in September, calling it the best in the industry “by an incredible margin.” Thanks to its massive market share, TSMC should be able to maintain that technology advantage. That gives it a lot more money than its competitors to invest in developing the next generation of technology, creating a virtuous cycle.

TSMC has been a clear winner as demand for AI chips soars. Revenue increased 39% in the third quarter, and earnings soared 54% as its margins expanded due to demand. The demand was mostly fueled by AI-related chips, but strong smartphone orders also helped move the needle. Fourth-quarter revenue is on track for 31% growth, as well as strong margins.

Investors should expect profit margins to contract as TSMC rolls out the next generation of its processes in late 2025. Still, they should expand over time as the company scales production, especially if demand for AI chips remains strong. With a growing need for high-end processing capabilities across devices, TSMC should be able to command an even greater share of semiconductor production over the next few years despite already holding a dominant position. As such, revenue should grow faster than the overall industry.

At its current price of around $200, shares trade for about 23 times forward earnings. That said, strong margins and growing revenue put analysts’ consensus estimate for 2025 earnings growth at 27%. While TSMC might not maintain that growth rate, it won’t come down from there very quickly as it remains a key piece of the puzzle in the continued advancement of artificial intelligence. With such strong growth potential, TSMC is a no-brainer for $200.