3 Stocks for a Value Portfolio: Undervalued Gems to Watch

Key Points

• As recent volatility comes into the market, capital will likely flow into value stocks in the following months.
• Three names stand out today because of their risk-to-reward ratios, leaving investors with enough choices.
• Wall Street analysts and institutional capital agree with these setups, implying a double-digit upside coming up.

It has become clear to investors who know what to look for that value stocks are about to be the end game for 2025, especially considering all of the volatility breakouts that have come up over the past couple of weeks. These range from economic data surprises like inflation to new trade tariff announcements from President Trump and just broader rotations inside the S&P 500 and NASDAQ indexes.

With this in mind, investors typically go into two places during volatile times like these: value stocks or consumer staples names for their safety and low volatility. Today, investors should go deeper than defensive names since this time around, the risk-to-reward looks fantastic for undervalued stocks that still carry enough fundamental reasons to get them to higher prices ahead.

Names like Advanced Micro Devices Inc. NASDAQ: AMD,  a chipmaker who has missed out on most of the artificial intelligence run in the technology sector, or energy drink maker Celsius Holdings Inc. NASDAQ: CELH, and even Chinese commerce and technology giant Alibaba Group NYSE: BABA all carry these same characteristics of having priced in some of the worst-case scenarios, leaving nothing but upside for savvy value investors.

Why Investors Might Consider Advanced Micro Devices Stock’s Recent Dip

After reporting earnings on the first week of February 2025, shares of Advanced Micro Devices shed over 8% in value overnight, a response from the market that left most investors wondering whether it was truly justified. The reason is that, despite this sell-off, the company actually reported good figures and growth across the board.

The problem is that this growth seems very small and bearish next to the bloated projections and performance that investors have gotten used to coming from other names like NVIDIA Co. NASDAQ: NVDA. So even a great quarter for Advanced Micro Devices is still seen as a relatively negative thing next to figures coming from peers.

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With this in mind, investors can start to see how this is a matter of perception and potential greed, which is why the current $158.7 consensus price target on Advanced Micro Devices stock matters all the more today, one that calls for up to 44% upside from where it trades today.

Another form of support investors can find when considering a potential buy in this name is the fact that institutional buyers from the Vanguard Group decided to boost their holdings in Advanced Micro Devices stock by 1% as of February 2025. While this may not sound like much on a percentage basis, it brought their position up to $18.1 billion.

The Worst Is in the Past for Celsius Stock

After a grueling 20% decline over the past month alone, it is safe for investors to assume that the worst for Celsius stock might be behind it. The reason is that, now that Celsius trades at a forward P/E ratio of only 25.2x, it is the lowest valuation the company has seen in its history since being public.

More than that, as the stock reached a low of only 22% of its 52-week high, there is nothing but upside to be had in this stock from here. This is the one theme that Wall Street analysts are focused on today when publishing their ratings for Celsius.

As of February 2025, the consensus valuation for Celsius is $47.6 per share, calling for up to 123% upside from today’s low price. As bullish as this may seem, however, it doesn’t even get close to the stock’s 52-week high of $99 per share. This way, investors can see just how high the ceiling is for the company compared to the potential downside.

This view would also explain why Vanguard decided to plunge into this stock, adding 2.2% to its holdings as of February 2025, bringing its net position to a high of $416.5 million today, or 6.7% ownership in the company.

Alibaba: The Most Important Stock in China

That’s Alibaba, and while it has already reached a new 52-week high, there are plenty of reasons to believe that the ceiling is much higher than today’s prices. One reason is the strong investor confidence in this company, with both David Tepper and Michael Burry making it the largest holding in their portfolios.

More than that, Chinese technology stocks, measured by the KraneShares CSI China Internet ETF NYSE: KWEB, have severely underperformed American technology stocks, leaving investors with a wide gap to be filled in terms of performance and valuations.

Ultimately, investors can gauge just how bullish the tailwinds behind Alibaba are by looking at the $25 billion stock buyback program approved and implemented by management. If insiders are this optimistic about the company’s future, enough to buy back over 10% of its market capitalization, then there’s got to be a strong reason why.

Knowing that the all-time highs for Alibaba are over $300 per share, today’s price seems minuscule compared to how much upside there’s really left in the stock, despite recent rallies to new 52-week highs.