MW These 13 tech stocks have grown profits rapidly - and their stocks are still on sale
By Christine Ji and Philip van Doorn
Meta, Nvidia and Microsoft shares trade at discounts to their historical valuations, along with other plays in the chip and software sectors
The S&P 500's concentration in 10 companies is at a peak. But investors can separate fairly valued stocks from expensive ones by looking at earnings growth.
With the artificial-intelligence trade supercharging valuations, investors may feel uneasy about putting money to work when the stock market is at near-record highs.
But there are several tech bargains hiding in plain sight - companies that have posted strong profit growth in recent years, but still trade below their five-year average valuations. Additionally, many of these companies, which are shown below, are expected to grow revenue and earnings at a faster rate than the S&P 500 SPX and Nasdaq Composite COMP indexes.
Some of them are even in the "Magnificent Seven," the group of large technology companies that have had a growing influence on the stock market in recent years. While those megacap tech stocks may seem expensive given their trillion-dollar-plus valuations, several actually trade at a discount to their historical valuation multiples.
As Big Tech players have gotten even bigger, they've been able to sway the market more and more. The SPDR S&P 500 ETF Trust SPY - an exchange-traded fund that tracks the U.S. large-cap benchmark index by holding all of its stocks, weighted by market capitalization - is 41% concentrated in just 10 companies, with Nvidia Corp. (NVDA), Apple Inc. $(AAPL)$ and Microsoft Corp. $(MSFT)$ having a combined 21.5% weighting. The index is at its peak concentration level, per data compiled by analysts at Ned Davis Research going back to 1972. Ten years ago, the index was 19% concentrated in its largest 10 companies.
But market concentration isn't necessarily a cause for concern, Allen Bond, portfolio manager at Jensen Investment Management, told MarketWatch. The dominance of the Magnificent Seven names, in particular, has been a direct result of their earnings growth, which has been responsible for 26% of the S&P 500's total net income over the last 12 months, according to Dow Jones Market Data.
Additionally, the Magnificent Seven are contributing the most to upward earnings revisions, according to a recent note from Apollo's chief economist, Torsten Slok. While 2026 earnings forecasts for the S&P 500 have recently climbed back above April levels, that recovery is entirely driven by upward revisions for the Magnificent Seven. By contrast, analysts have actually lowered their combined profit target for the other 493 companies in the index.
Screening for high-growth stocks at a reasonable price
For a broad tech screen, we began with the Nasdaq-100 Technology Sector index XX:NDXT, which is comprised of 45 tech-oriented stocks in the Nasdaq-100 NDX.
Then we narrowed the list to companies that have forward price-to-earnings ratios below their five-year average valuations, and which have increased earnings per share at compound annual growth rates (CAGR) of at least 10% over their last five full fiscal years. For reference, the S&P 500 grew its weighted EPS at an annualized pace of 8.3% in the five years through 2024, according to LSEG.
Here are the 13 companies that passed the screen, sorted by their five-year EPS CAGR:
Name Ticker 5-year EPS CAGR Forward P/E 5-year average forward P/E 2025 price change Nvidia Corp. NVDA 91.9% 28.7 52.8 39% NXP Semiconductors NV NXPI 62.8% 14.9 17.5 -3% ON Semiconductor Corp. ON 48.1% 16.8 20.4 -24% Fortinet Inc. FTNT 43.3% 27.6 46.0 -14% Autodesk Inc. ADSK 39.8% 26.6 43.4 1% Synopsys Inc. SNPS 33.3% 27.4 41.7 -19% Meta Platforms Inc. META 30.0% 20.5 23.3 4% Advanced Micro Devices Inc AMD 27.2% 39.4 48.9 105% Micron Technology Inc. MU 26.2% 12.9 49.4 182% ASML Holding NV ASML 25.6% 33.2 40.5 47% Microsoft Corp. MSFT 18.8% 28.9 31.6 19% Adobe Inc. ADBE 15.6% 14.2 34.6 -25% Intuit Inc. INTU 14.6% 26.5 37.4 3% Source: LSEG
The list features three names among the Magnificent Seven, as well as tech heavyweight Advanced Micro Devices Inc. $(AMD)$ During AMD's investor day earlier this week, the company shared that it anticipates growing its AI data-center chips business at an 80% compound annual growth rate, and projects that its overall annual revenue growth will come out to 35% in the next five years.
Among the the three members of the Magnificent Seven that passed the screen, Nvidia has seen the most dramatic decline in its forward P/E - not only because its earnings have increased so significantly, but because analysts' rolling 12-month EPS estimates have been increasing even more quickly than the company's share price.
Read: This could be a 'radically bullish' sign for Nvidia, AMD and other chip stocks
Microsoft has one of the highest P/E ratios among companies passing the screen, and as you can see in the next table, the company is expected to increase earnings at a slightly slower pace over the next two years as it continues to invest heavily in the AI buildout.
Another deal: Microsoft's stock rises as new OpenAI partnership comes as a relief to investors
Meta's forward P/E has come down to 20.5 in light of the stock's 10% postearnings decline, from Oct. 29 through Thursday's close. Investors have panned the company's plan to continue increasing its capital expenditures for AI development.
A possible opportunity: Meta's stock is the new 'Magnificent Seven' doormat. Should you buy the dip?
Other AI infrastructure players on the list include hardware producers NXP Semiconductors $(NXPI)$, ON Semiconductor Corp. $(ON)$, Micron Technology Inc. $(MU)$, ASML Holding $(ASML)$ and Synopsys Inc. $(SNPS)$ While revenues for Micron and ASML have been lifted by AI tailwinds, the more automotive-focused NXP and ON have experienced a cyclical downturn in 2025.
There are also opportunities outside of direct AI beneficiaries. Although software hasn't been a well-loved area of the market this year, select companies currently offer investors solid growth at cheap prices. The iShares Expanded Tech-Software Sector ETF IGV has lagged behind the iShares Semiconductor ETF SOXX, with returns of 6.7% and 35%, respectively, this year through Thursday.
However, within the sector, Adobe Inc. $(ADBE)$, Autodesk Inc. $(ADSK)$, Fortinet Inc. $(FTNT)$ and Intuit Inc. $(INTU)$ all screened for high historical earnings growth.
Concerns that AI will harm traditional enterprise software have weighed on large software names. Adobe is one example, and the stock has dropped 24% so far in 2025. In September, the company reported that revenue for its fiscal third quarter had increased 11% from the year-earlier quarter. This was mainly subscription revenue, and the company is well known for having a loyal user base for software such as Photoshop, Illustrator and Premiere Pro. But there is some uncertainty about how long it will take for Adobe to benefit from AI.
Tax- and accounting-software provider Intuit is another example of a business with solid revenue and earnings growth. The TurboTax and QuickBooks owner provides "mission-critical technology that locks in a lot recurring revenue from customers," said Jensen Investment Management's Bond. However, similar to Adobe, it's not completely clear to investors if AI will be additive to the business.
"There's a bit of a cloud that sits over the top of some businesses that are producing really good financial results," Bond said.
Also read: 5 bubble-resistant tech stocks to guard your portfolio from an AI crash
A look ahead
Even though only five of the 13 stocks passing the screen have current forward P/E multiples below that of the S&P 500 (22.6), many of them can be considered to have attractive valuations based on growth projections.
Leaving the companies in the same order, here are two-year projected compound annual growth rates for sales and EPS from their current fiscal years through the following two fiscal years, based on consensus estimates among analysts polled by LSEG. Projected CAGR for the Nasdaq-100 and the S&P 500 are at the bottom of the table.
Name Ticker Projected 2-year revenue CAGR Projected 2-year EPS CAGR Forward P/E Nvidia Corp. NVDA 48.5% 50.2% 28.7 NXP Semiconductors NV NXPI 2.9% 2.8% 14.9 ON Semiconductor Corp. ON -5.7% -14.6% 16.8 Fortinet Inc. FTNT 12.9% 14.3% 27.6 Autodesk Inc. ADSK 13.3% 16.8% 26.6 Synopsys Inc. SNPS 25.6% 3.6% 27.4
MW These 13 tech stocks have grown profits rapidly - and their stocks are still on sale
By Christine Ji and Philip van Doorn
Meta, Nvidia and Microsoft shares trade at discounts to their historical valuations, along with other plays in the chip and software sectors
The S&P 500's concentration in 10 companies is at a peak. But investors can separate fairly valued stocks from expensive ones by looking at earnings growth.
With the artificial-intelligence trade supercharging valuations, investors may feel uneasy about putting money to work when the stock market is at near-record highs.
But there are several tech bargains hiding in plain sight - companies that have posted strong profit growth in recent years, but still trade below their five-year average valuations. Additionally, many of these companies, which are shown below, are expected to grow revenue and earnings at a faster rate than the S&P 500 SPX and Nasdaq Composite COMP indexes.
Some of them are even in the "Magnificent Seven," the group of large technology companies that have had a growing influence on the stock market in recent years. While those megacap tech stocks may seem expensive given their trillion-dollar-plus valuations, several actually trade at a discount to their historical valuation multiples.
As Big Tech players have gotten even bigger, they've been able to sway the market more and more. The SPDR S&P 500 ETF Trust SPY - an exchange-traded fund that tracks the U.S. large-cap benchmark index by holding all of its stocks, weighted by market capitalization - is 41% concentrated in just 10 companies, with Nvidia Corp. (NVDA), Apple Inc. (AAPL) and Microsoft Corp. (MSFT) having a combined 21.5% weighting. The index is at its peak concentration level, per data compiled by analysts at Ned Davis Research going back to 1972. Ten years ago, the index was 19% concentrated in its largest 10 companies.
But market concentration isn't necessarily a cause for concern, Allen Bond, portfolio manager at Jensen Investment Management, told MarketWatch. The dominance of the Magnificent Seven names, in particular, has been a direct result of their earnings growth, which has been responsible for 26% of the S&P 500's total net income over the last 12 months, according to Dow Jones Market Data.
Additionally, the Magnificent Seven are contributing the most to upward earnings revisions, according to a recent note from Apollo's chief economist, Torsten Slok. While 2026 earnings forecasts for the S&P 500 have recently climbed back above April levels, that recovery is entirely driven by upward revisions for the Magnificent Seven. By contrast, analysts have actually lowered their combined profit target for the other 493 companies in the index.
Screening for high-growth stocks at a reasonable price
For a broad tech screen, we began with the Nasdaq-100 Technology Sector index XX:NDXT, which is comprised of 45 tech-oriented stocks in the Nasdaq-100 NDX.
Then we narrowed the list to companies that have forward price-to-earnings ratios below their five-year average valuations, and which have increased earnings per share at compound annual growth rates (CAGR) of at least 10% over their last five full fiscal years. For reference, the S&P 500 grew its weighted EPS at an annualized pace of 8.3% in the five years through 2024, according to LSEG.
Here are the 13 companies that passed the screen, sorted by their five-year EPS CAGR:
Name Ticker 5-year EPS CAGR Forward P/E 5-year average forward P/E 2025 price change
Nvidia Corp. NVDA 91.9% 28.7 52.8 39%
NXP Semiconductors NV NXPI 62.8% 14.9 17.5 -3%
ON Semiconductor Corp. ON 48.1% 16.8 20.4 -24%
Fortinet Inc. FTNT 43.3% 27.6 46.0 -14%
Autodesk Inc. ADSK 39.8% 26.6 43.4 1%
Synopsys Inc. SNPS 33.3% 27.4 41.7 -19%
Meta Platforms Inc. META 30.0% 20.5 23.3 4%
Advanced Micro Devices Inc AMD 27.2% 39.4 48.9 105%
Micron Technology Inc. MU 26.2% 12.9 49.4 182%
ASML Holding NV ASML 25.6% 33.2 40.5 47%
Microsoft Corp. MSFT 18.8% 28.9 31.6 19%
Adobe Inc. ADBE 15.6% 14.2 34.6 -25%
Intuit Inc. INTU 14.6% 26.5 37.4 3%
Source: LSEG
The list features three names among the Magnificent Seven, as well as tech heavyweight Advanced Micro Devices Inc. (AMD) During AMD's investor day earlier this week, the company shared that it anticipates growing its AI data-center chips business at an 80% compound annual growth rate, and projects that its overall annual revenue growth will come out to 35% in the next five years.
Among the the three members of the Magnificent Seven that passed the screen, Nvidia has seen the most dramatic decline in its forward P/E - not only because its earnings have increased so significantly, but because analysts' rolling 12-month EPS estimates have been increasing even more quickly than the company's share price.
Read: This could be a 'radically bullish' sign for Nvidia, AMD and other chip stocks
Microsoft has one of the highest P/E ratios among companies passing the screen, and as you can see in the next table, the company is expected to increase earnings at a slightly slower pace over the next two years as it continues to invest heavily in the AI buildout.
Another deal: Microsoft's stock rises as new OpenAI partnership comes as a relief to investors
Meta's forward P/E has come down to 20.5 in light of the stock's 10% postearnings decline, from Oct. 29 through Thursday's close. Investors have panned the company's plan to continue increasing its capital expenditures for AI development.
A possible opportunity: Meta's stock is the new 'Magnificent Seven' doormat. Should you buy the dip?
Other AI infrastructure players on the list include hardware producers NXP Semiconductors (NXPI), ON Semiconductor Corp. (ON), Micron Technology Inc. (MU), ASML Holding (ASML) and Synopsys Inc. (SNPS) While revenues for Micron and ASML have been lifted by AI tailwinds, the more automotive-focused NXP and ON have experienced a cyclical downturn in 2025.
There are also opportunities outside of direct AI beneficiaries. Although software hasn't been a well-loved area of the market this year, select companies currently offer investors solid growth at cheap prices. The iShares Expanded Tech-Software Sector ETF IGV has lagged behind the iShares Semiconductor ETF SOXX, with returns of 6.7% and 35%, respectively, this year through Thursday.
However, within the sector, Adobe Inc. (ADBE), Autodesk Inc. (ADSK), Fortinet Inc. (FTNT) and Intuit Inc. (INTU) all screened for high historical earnings growth.
Concerns that AI will harm traditional enterprise software have weighed on large software names. Adobe is one example, and the stock has dropped 24% so far in 2025. In September, the company reported that revenue for its fiscal third quarter had increased 11% from the year-earlier quarter. This was mainly subscription revenue, and the company is well known for having a loyal user base for software such as Photoshop, Illustrator and Premiere Pro. But there is some uncertainty about how long it will take for Adobe to benefit from AI.
Tax- and accounting-software provider Intuit is another example of a business with solid revenue and earnings growth. The TurboTax and QuickBooks owner provides "mission-critical technology that locks in a lot recurring revenue from customers," said Jensen Investment Management's Bond. However, similar to Adobe, it's not completely clear to investors if AI will be additive to the business.
"There's a bit of a cloud that sits over the top of some businesses that are producing really good financial results," Bond said.
Also read: 5 bubble-resistant tech stocks to guard your portfolio from an AI crash
A look ahead
Even though only five of the 13 stocks passing the screen have current forward P/E multiples below that of the S&P 500 (22.6), many of them can be considered to have attractive valuations based on growth projections.
Leaving the companies in the same order, here are two-year projected compound annual growth rates for sales and EPS from their current fiscal years through the following two fiscal years, based on consensus estimates among analysts polled by LSEG. Projected CAGR for the Nasdaq-100 and the S&P 500 are at the bottom of the table.
Name Ticker Projected 2-year revenue CAGR Projected 2-year EPS CAGR Forward P/E Nvidia Corp. NVDA 48.5% 50.2% 28.7 NXP Semiconductors NV NXPI 2.9% 2.8% 14.9 ON Semiconductor Corp. ON -5.7% -14.6% 16.8 Fortinet Inc. FTNT 12.9% 14.3% 27.6 Autodesk Inc. ADSK 13.3% 16.8% 26.6 Synopsys Inc. SNPS 25.6% 3.6% 27.4
(MORE TO FOLLOW) Dow Jones Newswires
November 15, 2025 07:30 ET (12:30 GMT)
MW These 13 tech stocks have grown profits -2-
Meta Platforms Inc. META 19.9% 15.4% 20.5
Advanced Micro Devices Inc. AMD 31.8% 39.7% 39.4
Micron Technology Inc. MU 30.1% 56.9% 12.9
ASML Holding NV ASML 10.8% 17.7% 33.2
Microsoft Corp. MSFT 15.8% 18.3% 28.9
Adobe Inc. ADBE 9.9% 13.1% 14.2
Intuit Inc. INTU 12.7% 14.7% 26.5
S&P 500 SPX 6.2% 14.1% 22.6
Nasdaq-100 Index NDX 11.1% 16.4% 27.6
Source: LSEG
All of the stocks except for NXP Semiconductors and ON Semiconductor have projected two-year sales CAGR higher than that of the S&P 500. All but four have projected two-year sales CAGR higher than that of the Nasdaq-100.
For projected EPS CAGR, nine have numbers higher than that of the S&P 500, and only six have numbers higher than that of the Nasdaq 100.
Click on the tickers for more information about each company.
Read: Tomi Kilgore's detailed guide to the information available on the MarketWatch quote page
-Christine Ji -Philip van Doorn
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
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November 15, 2025 07:30 ET (12:30 GMT)
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