By Angela Palumbo

Some of the largest technology stocks are trading at historically cheap valuations as earnings season starts back up.

But with tariffs and geopolitical tensions clouding the outlook, investors may also be looking for tech shares with hefty AI exposure.

Nvidia is one of those stocks.

Nvidia is expected to report second-quarter earnings at the end of August, but investors could get a taste of demand for the company's hardware as other tech companies report their AI spending plans in the weeks ahead.

Meanwhile, Nvidia investors have celebrated the stock's comeback from April lows, with share now up 21% this year. The AI chip maker also become the first company to hit a $4 trillion market cap on Wednesday.

Nvidia continues to benefit from massive demand for its AI hardware. The company said in May that it expects second-quarter revenue of about $45 billion, which would be a 50% increase from the previous year's $30 billion.

Shares are trading at 33.1 times earnings expected over the next 12 months, which is below the five-year average of 39.9 times, according to Dow Jones Market Data. For comparison, the S&P 500 is trading at 22.4 times forward earnings.

Other chip maker stocks are also doing well thanks to AI demand. Shares of Micron Technology have surged 46% this year, compared with the 6.7% gain of the S&P 500. The maker of high bandwidth memory chips -- which are increasingly used in AI applications -- reported better-than-expected third-quarter financial results on June 25 while also providing strong guidance. Shares of Micron are trading at 10.6 times earnings expected over the next 12 months. That is below its five-year average of 18.8 times.

There are also the tech stocks that aren't having stellar performances this year, but are trading below their historic averages. Amazon.com stock has risen 0.7% in 2025.

Investors were cautious after the e-commerce giant reported first-quarter earnings in May. Sales for Amazon Web Services -- the company's cloud computing unit -- came in below expectations and growth slowed compared with rivals such as Microsoft. There are also concerns the company, which imports many of its goods into the U.S., is highly exposed to tariff risks and could face a slowdown if consumers cut back shopping habits.

Shares now trade at 32.8 times forward earnings, below the 5-year average of 53.9 times. Amazon is expected to report second-quarter financials at the end of July.

Alphabet is the cheapest of the Magnificent 7, trading at 17.7 times forward earnings, which is below its five-year average of 22.3 times. Shares have fallen 7% this year as Wall Street grapples with regulatory concerns and AI search competition. The search giant is also expected to report earnings by the end of the month.

Investors will have to decide if they want to bet on these stocks now as earnings inch closer.

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

July 10, 2025 15:29 ET (19:29 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.