Morningstar

2 Cheap Stocks to Buy in July

The stocks of these wide-moat companies look like bargains today.

2 Cheap Stocks to Buy in July
Securities in This Article
Alphabet Inc Class A
(GOOGL)
Broadcom Inc
(AVGO)
NVIDIA Corp
(NVDA)
Palantir Technologies Inc Ordinary Shares - Class A
(PLTR)
Salesforce Inc
(CRM)

Susan Dziubinski: Hi, I’m Susan Dziubinski, co-host of The Morning Filter podcast. In a recent episode, Morningstar’s Chief US Market Strategist, Dave Sekera, talked about a few undervalued, quality technology and tech-related stocks to buy for July. Dave’s picks were Alphabet GOOGL, Palantir PLTR and Salesforce CRM.

Today, we’re looking at two more undervalued tech stocks to buy in July. Both carry wide

economic moat ratings
from Morningstar, and both are trading well below what we think they’re worth.

2 Cheap Stocks to Buy in July

  1. Broadcom AVGO
  2. Nvidia NVDA

Our first cheap stock to buy in July is Broadcom. Broadcom is an amalgamation of high-value and differentiated chip and software businesses. We think the company has carved out a wide economic moat stemming from intangible assets and chip design, and switching costs for its software products. Broadcom’s stock has been pressured by market worries over competition for Google’s TPU design. We believe its position in Google is sound, and we see a diversified customer base for Broadcom’s custom AI chips, including immense volumes to OpenAI. We see a massive AI chip opportunity here. Broadcom’s stock trades well below our $650 fair value estimate.

Read Morningstar’s full report on Broadcom.

The other cheap stock to buy in July is Nvidia. Nvidia has a wide economic moat thanks to its market leadership in graphics processing units, hardware, software, and networking tools needed to enable the exponentially growing market around artificial intelligence. There’s no slowdown in demand for Nvidia’s artificial intelligence gear, and the company is doing all it can to expand its supply chain to meet the insatiable demand. Nvidia’s revenue growth is broad-based across customers and profits remain stellar. We think Nvidia stock is worth $280 per share.

Read Morningstar’s full report on Nvidia.

For more stock ideas, be sure to tune in to The Morning Filter wherever you get your podcasts and visit Morningstar.com, too.

Morningstar senior analysts Brian Colello and Will Kerwin provided the research behind this segment.

Watch 3 ‘Bubbly’ Stocks to Avoid for more from Susan Dziubinski.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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