Rising interest rates are starting to squeeze easy money out of the artificial intelligence boom, which puts a spotlight on AI stocks where expectations have run ahead of fundamentals. When capital gets pricier, investors often care more about what they pay for each dollar of earnings or cash flow. That is where this group of potentially undervalued AI players comes in. This article highlights three standouts from that list.
The three AI stocks covered below are only a sample, and the wider screen surfaced 53 more companies with equally compelling narratives that are not discussed here. To hunt through the broader opportunity set yourself, head straight to the Undervalued Artificial Intelligence/ AI Stocks screener to identify, filter, and analyze potential high conviction AI ideas.
PagerDuty (PD)
PagerDuty plugs straight into the AI operations story, using machine learning and generative tools to keep always on digital services running for enterprises that are leaning into ChatGPT era automation.
PagerDuty runs a digital operations platform that uses AI to monitor, predict, and resolve software incidents, with AIOps and generative AI features embedded in its Operations Cloud. The business generated about US$494 million from software and programming and carries a market value near US$1.3b.
"While management highlights that usage-based products such as AIOps, PagerDuty Advance and Operations Cloud are nearly 10% of ARR and that Operations Cloud ARR nearly doubled sequentially earlier in FY27, the modest Q2 FY27 revenue of US$124.4 million and flat full-year revenue outlook suggest that the shift away from seat-based pricing may continue to dilute near-term monetization and keep revenue growth subdued even as platform utilization rises."
What happens if one quiet assumption about how that new usage model feeds through to future pricing power and profitability proves too cautious?
If that shift proves too cautious, read the full narrative for PagerDuty to see how pricing power, AI adoption, and sentiment could be quietly decoupling from today's headline numbers.
Baidu (BIDU)
Baidu weaves its ERNIE Bot large language model directly into search, apps, video, and cloud, giving the group a clear AI focus while still leaning heavily on broader internet services and entertainment for most of its money making power.
Baidu runs a broad China internet platform anchored in search, short video, AI cloud, and autonomous driving, with iQIYI as a separate online video unit. Baidu General Business produced about CN¥101.9b, iQIYI added roughly CN¥26b, and the stock carries a market value near US$25.2b.
Baidu's AI story matters here because ERNIE Bot is not a side project but sits inside the Baidu App, cloud tools, and AI chips that power real workloads for users and enterprises.
"Baidu's leadership in foundation models and proprietary AI architectures is now supported by its Kunlunxin chip unit, which has three generations of self developed accelerators deployed at large scale and underpins GPU Cloud revenue growth that reached very large triple digit percentages in early 2026, giving Baidu more control over AI compute cost and potential earnings quality."
What investors need to weigh now is how one unresolved pressure on future profitability shapes the payoff from all of that AI spend.
If that profitability question is front of mind, read the full narrative for Baidu to see whether ERNIE investment is masking underappreciated upside or just stretching the story.
Super Micro Computer (SMCI)
Super Micro Computer leans into the AI datacenter build out by supplying GPU dense liquid and air cooled servers that power large language model training and inference, which makes its hardware and services a direct pick and shovel play on the ChatGPT era.
Super Micro Computer generates about US$39.1b from high performance server solutions spanning AI servers, storage and rack level services, and the stock carries a market value near US$21.6b.
For investors looking at AI infrastructure rather than consumer facing apps, Super Micro Computer offers a way to plug into the heavy lifting behind ChatGPT style workloads while still owning a broader server and storage vendor.
"The company's launch and rapid expansion of its Data Center Building Block Solution allows customers to deploy turnkey, energy efficient and customized AI data centers faster than traditional solutions. This supports a higher margin product mix and can lift gross and operating margins over time."
What really matters is how one unseen pressure on those margins interacts with demand if AI server pricing or deal mix starts to shift.
If that margin squeeze is what you are trying to size, the full narrative for Super Micro Computer maps how Super Micro Computer's AI momentum and hardware mix could be quietly accelerating earning power.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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