Recently, artificial intelligence (AI) firms have been reshaping the economy. As such, investors are on the prowl for cheap AI stocks. Artificial intelligence and the Internet of Things (IoT) have shown strong potential in streamlining operations for businesses.

Data flows have been getting larger every year. This has lead to the need for AI to become increasingly proficient at handling them. In practice this has translated to businesses and specialists being able automate the monitoring of key processes, workflows and even logistics networks.

These benefits only provide a brief snapshot of the possibilities that AI and IoT can provide. There is a high likelihood that consumer demand for AI products will lead to an increase in value for these three cheap AI stocks to add to your portfolio. 

Micron Technology (MU)

Micron Technology (NASDAQ:MU) is an industry leader in innovative memory and storage solutions, delivering a rich portfolio of high performance products through the Micron and Crucial brands. Micron’s diverse selection of industry-leading products is its main competitive advantage.

MU stock has grown 21% year-to-date (YtD). Additionally, in Q3 2023 Micron exceeded expectations, with revenue of $3.8 billion, non-GAAP EPS of -$1.43, operating expenses of $866 million, $11.4 billion in cash and investments and $13.9 billion total liquidity.

AI servers have driven higher-than-expected industry demand for memory and storage. This puts Micron in an excellent position for growth. For instance, Micron’s low-power DRAM innovation is capable of delivering significant reductions to data center power consumption compared to other solutions. Consequently it can better power AI servers that typically need 6x to 8x more DRAM than standard servers.

To summarize, Micron’s products leveraging on the recent AI wave will lead to growth for the stock.

Axcelis Technologies (ACLS)

Axcelis Technologies (NASDAQ:ACLS) is a corporation that engages in designing, manufacturing and servicing equipment for the semiconductor industry. The company’s mission is to aid semiconductor manufacturers in obtaining the highest quality with the lowest costs possible.

ACLS has healthy financials, with Q1 revenue of $254 million beating analyst expectations by $14 million. The stock shows signs of being undervalued with normalized EPS at $1.43 beating out analyst expectations by $0.13 and growing 16.9% year-over-year (YoY).

With AI becoming increasingly popular, consumers will need faster semiconductors to take full advantage of the technology. This bodes well for the semiconductor market. It also means that services provided by leading companies, such as Axcelis, will be in greater overall demand.

More notably, Axcelis recently announced that it would be delivering multiple shipments of its high-current ion implant units to leading power device chipmakers in Europe and Asia. These shipments will be utilized in the production of semiconductors for electric vehicles. With multiple shipments to international manufacturers, Axcelis will strengthen its international market, allowing for further growth and international presence.

ACLS stock up 122% YtD and has a “Strong Buy” rating from analysts. This stock is an AI stock to buy before it bounces back.

Super Micro Computer (SMCI)

Super Micro Computer (NASDAQ:SMCI) is a global company that develops and manufactures high-performance servers and storage solutions.

SMCI stock has demonstrated exceptional performance, soaring 550% in the past year.

The global information technology (IT) market value was at $9.5 trillion in 2022 and is expected to grow. Not suprisingly, AI has emerged as a powerful growth catalyst in the IT sector. It is driving efficiency through data analysis, enhancing customer experiences through virtual assistants and bolstering cybersecurity defenses through real-time threat detection.

Super Micro has established a remarkable track record of financials, evident in its robust YoY revenue growth of approximately 42%. So far in fiscal year 2023, the company has demonstrated strong operational performance and exceptional leadership. This is reflected in its remarkable YoY ROE growth of 144.86% surpassing the sector average of -3.20%.

The company’s success and the news about intelligence platforms and system technology uniquely positions it at the forefront of the market. As large enterprises and startups heavily invest in AI, Super Micro’s innovative arrangements give it an upper hand delivering a promising outlook for the company’s future development.

Investors should buy this undervalued AI stock. Its strong financials and the significant growth opportunities presented by the expanding global IT market certainly make it an enticing addition to your portfolio.

On the date of publication, Michael Que did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.