Keithen Drury, The Motley Fool

Fri, May 30, 2025, 5:45 AM5 min read

• Alphabet is still delivering excellent growth, considering its size.

• Adobe is fending off fears of replacement by generative AI.

• 10 stocks we like better than Alphabet ›

The list of what I'd consider "cheap" tech stocks has shrunk as the market has recovered over the past few weeks, but there are still some out there that could certainly have that label applied. Two that I think deserve the moniker are Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Adobe (NASDAQ: ADBE).

Both of these companies are dominant in their respective industries. Yet investors have already assumed that artificial intelligence will permanently disrupt them, even though they're rolling out their own AI solutions. I think the market has gotten these two stocks wrong, and their current cheap stock prices look like a serious buying opportunity.

Both companies are mature and producing profits, so we'll use the forward price-to-earnings (P/E) ratio to assess their affordability. Using this measure, both Alphabet and Adobe trade for around or under 20 times forward earnings:

This is significant because the broader market, as measured by the S&P 500 (SNPINDEX: ^GSPC), trades for 22.1 times forward earnings. This well-established benchmark gives me confidence in labeling these two companies as cheap, as they're still growing at a solid rate despite their price tags.

Alphabet's primary business is the Google search engine, although it has other successful brands under its umbrella like Google Cloud, YouTube, and the Android operating system. However, investors are most worried about the search business being disrupted. Their assumption is that an AI-powered search alternative will replace Google.

Alphabet's executives aren't blind to this notion and have already integrated AI search overviews into Google results; they've become a popular feature. This may be enough to bridge the gap between traditional search and a full-on AI experience, but Wall Street assumes this won't be enough.

Last quarter, Google Search revenue rose 10% year over year, so it hasn't lost its edge quite yet.

Investors are also focusing on Alphabet's trouble with the federal government for operating two illegal monopolies (one in search and one on its advertising platform). This threat is real, as the Department of Justice has already considered forcing Alphabet to sell certain parts of its business. However, we're a long way away from learning the outcome of this case, as there are multiple appeals processes to go through. With that in mind, I'll set this threat aside, because there's nothing investors can currently do about it.