Technology stocks helped fuel the market rally that began in late 2022, when OpenAI’s ChatGPT went public. Since then many technology stocks They have thrived in what has become an artificial intelligence (AI) boom. Companies are pouring billions of dollars into AI infrastructure, laying the groundwork for what some think will eventually become one of humanity’s most revolutionary technologies.
This euphoria has propelled the stock market to all-time highs, but that also means there aren’t many bargains to be had. Fortunately, there are still some high-quality companies trading at reasonable valuations, even after the impressive price movements over the past month.
Here are three hot tech stocks trading at reasonable valuations that investors will want to consider in 2025.
Image source: Advanced Micro Devices (AMD).
Nvidia AI has been dominating the chip space since early 2023, but don’t write that off Advanced Micro Devices(NASDAQ:AMD). The stock’s share price has risen more than 50% in the past month amid potential game-changing developments in the business world.
Seer he said this plans to deploy 50,000 Sales of AMD’s next-generation MI450 chips will begin before the end of next year. Moreover, International Business Machines announced plans to use AMD chips to process algorithms to fix bugs in quantum computers.
These could be signs that AMD is finally starting to break Nvidia’s dominance in artificial intelligence and related fields that require cutting-edge semiconductors (chips). This bodes very well for AMD, given that experts believe data center investments will continue over the next few years and reach over $5 trillion worldwide by 2030.
AMD shares are currently trading at around 64 times 2025 earnings estimates. Wall Street analysts expect the company to grow its earnings per share at an average annual rate of almost 35% over the next three to five years. Such growth would undoubtedly justify a high valuation, and AMD’s recent announcements are a hopeful sign that the company can deliver as it should.
The AI chip boom has been a tremendous opportunity for: ASML (NASDAQ:ASML). The Dutch company is the world’s only manufacturer of EUV (extreme ultraviolet light) lithography systems that print complex circuit patterns onto chips. This makes ASML a crucial role player in AI because the most complex and advanced AI chips require the most advanced manufacturing processes.
Unfortunately, ASML’s shares started the year on a sour note. The company has been caught up in international trade tensions between the US and China, which have cast a shadow over its business outlook as pressure grows to restrict its dealings with China. These concerns have dissipated somewhat amid stellar earnings results highlighting strong EUV demand. ASML is currently trading near its 52-week high, including a nearly 10% gain over the past month.
ASML’s forward P/E ratio is currently 35 times estimated full-year earnings. Again, that’s not a bargain, but it’s also fair for a business that Wall Street believes will grow earnings by almost 21% annually over the next three to five years. The future is bright for ASML as chip innovation continues to drive increased investment in EUV lithography.
Digital advertising is a huge industry worth approximately $700 billion and growing. Trading Desk(NASDAQ:TTD) has demonstrated outstanding performance as the leading independent advertising technology platform. Essentially, the company helps brands advertise in digital spaces outside of their walled garden ecosystems AlphabetGoogle and Meta Platforms Facebook. As a result, Trade Desk’s shares have outperformed the broader market throughout its life.
But the stock fell earlier this year after the company’s weak earnings results ended a years-long streak of high growth forecasts. The Trade Desk was in the process of transitioning to a new technology platform. Moreover, uncertainty about the economy and potential trade war also put pressure on growth expectations. The stock appears to be regaining momentum; Its shares are up nearly 11% in the past month.
It’s currently trading at around 30 times Trade Desk 2025 earnings estimates. Meanwhile, analysts expect annual earnings per share growth of approximately 20% over the next three to five years. If the company returns to its old expectations-beating ways and can rebuild market confidence, the stock’s current valuation will leave enough room to continue its recent hot streak.
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Justin Pope It has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Alphabet, International Business Machines, Meta Platforms, Nvidia, Oracle, and The Trade Desk. The Motley Fool has a feature disclosure policy.
