Three Tech Leaders Positioned to Benefit From AI Momentum: Where Valuations Still Offer Room to Run

Key Points

• ON Semiconductor, Trimble, and PTC offer compelling entry points for AI-exposed tech investors seeking value
• Each company stands to see significant earnings acceleration through machine learning integration
• Current trading multiples remain attractive relative to near-term growth catalysts

The Value Play in AI-Driven Technology

The race to monetize artificial intelligence has inflated valuations across much of the technology sector, yet pockets of opportunity remain. These three industrial-technology stocks demonstrate meaningful exposure to AI’s proliferation without trading at stratospheric premiums. All three are actively embedding machine learning capabilities into their core offerings while maintaining reasonable multiples on forward cash flow generation.

ON Semiconductor: Positioned for Cyclical Recovery and Structural Tailwinds

ON Semiconductor (NASDAQ: ON) has faced headwinds as growth investments slowed within key verticals—particularly electric vehicles and factory automation. However, these temporary pressures obscure a more favorable longer-term picture. The EV market remains automotive’s primary growth engine, and industrial automation continues driving productivity gains in high-cost labor markets.

More importantly, the structural shift toward AI-powered systems creates a natural tailwind for ON Semiconductor’s business. Its sensor technology plays a vital role in advanced driver assistance systems, while its intelligent power management solutions are embedded across EV platforms. The company has also secured partnerships with leading AI infrastructure providers and operates a high-growth power solutions division serving data center operators.

With sales already showing signs of inflection and the stock trading at just 11.3 times estimated 2026 free cash flow, ON Semiconductor appears undervalued relative to the growth catalysts ahead.

Trimble: Early-Stage AI Opportunity With Platform Scale

Trimble (NASDAQ: TRMB) operates at the intersection of physical and digital systems—a positioning that becomes increasingly valuable as AI analytics mature. The company serves construction, logistics, and geospatial markets, deploying highly precise hardware that continuously generates rich datasets ripe for machine learning applications.

Consider the company’s infrastructure applications: project managers can now monitor structural element placement against 3D digital models in real time, using Trimble’s data platform. Similarly, logistics networks benefit from AI-driven optimization across thousands of connected devices. As CEO Rob Painter has noted, the company has been experimenting with AI for years but is “still early in the game at the customer level.”

With hundreds of thousands of instruments and machines operating on Trimble’s platform worldwide, the upside from AI-powered workflow improvements remains largely unexplored. The company projects doubling free cash flow from $500 million in 2024 to $1 billion by 2027, while growing recurring revenue at mid-teens rates. At 22 times forward free cash flow, Trimble trades at a reasonable valuation for investors seeking exposure to AI adoption in operational technology.

PTC: AI as a Value-Multiplier for Lifecycle Management Software

The industrial sector is undergoing digital transformation, with manufacturers embedding advanced analytics into physical processes to drive continuous improvement. PTC (NASDAQ: PTC) supplies the software infrastructure enabling this shift—spanning design, manufacturing, operations, and service phases of product lifecycles.

Traditional manufacturing relied on static processes and retrospective adjustments. PTC’s platform enables real-time monitoring, which becomes dramatically more powerful as deep learning algorithms enhance analytical output quality. The company is systematically embedding AI capabilities throughout its solution suite.

PTC has expanded recurring revenue at high single-digit rates while accelerating free cash flow growth into the mid-teens. Despite this expansion, the stock trades below 21 times estimated 2026 free cash flow—an attractive multiple for a software business compounding cash flow at these rates. For growth-oriented value investors, PTC represents compelling risk-reward dynamics.

The Broader Context: Why These Valuations Matter

What distinguishes these three opportunities is their combination of:

• Active AI integration across product roadmaps
• Reasonable valuation multiples (11-22x forward FCF) relative to growth rates
• Exposure to secular tailwinds beyond cyclical fluctuations
• Demonstrated execution in expanding free cash flow generation

The tech sector’s AI enthusiasm has created genuine value destruction in overpriced names while leaving pockets of mispriced opportunity. These three companies exemplify the latter category.