My Top 2 AI Stocks Flying Under the Radar for May 2026
My Top 2 AI Stocks Flying Under the Radar for May 2026
Dave Kovaleski, The Motley FoolThu, May 14, 2026 at 5:20 AM UTC
0
Key Points -
Aehr Test Systems stock is up 379% YTD and is still relatively cheap.
ServiceNow stock has been battered, but its reduced valuation and robust pipeline makes it worth a look.
10 stocks we like better than Aehr Test Systems ›
Artificial intelligence (AI) stocks have not exactly flown under the radar over the past three or four years. There have been major blips across the screen that have garnered massive investor attention -- mostly positive, although they did receive some negative attention earlier this year.
But there are some AI stocks that have been mostly overlooked that investors should get to know. Here are two top, under-the-radar AI stocks to consider this month.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
An investor holding a chart, comparing the data to numbers on a laptop.
Image source: Getty Images.
1. Aehr Test Systems
Aehr Test Systems (NASDAQ: AEHR) stock has been discovered by many investors in recent months, but it is still not that well-known compared to stocks like Nvidia, Sandisk, and Palantir. But the stock has generated ridiculously high returns like those of AI juggernauts in recent years, up 379% year to date (YTD) and a whopping 961% over the past year.
Aehr Test Systems makes the equipment and machines that test AI chips for data centers, electric vehicles, industrial, and other applications. Aehr specializes in wafer-level testing, meaning it can test an entire wafer of multiple chips instead of testing them one at a time.
The recent spike in the stock price stems from a significant backlog of contracts in the pipeline, as reported in its third fiscal quarter 2026 earnings report on April 7. The firm only had $10 million in revenue in Q1, but booked $37 million in future business in the quarter.
Later in April, Aehr announced that it had received a $41 million contract from a major hyperscaler client, boosting its total bookings in the pipeline to about $92 million. In fiscal 2027, analysts anticipate a 71% increase in revenue and earnings to rise from a net loss of $0.09 per share in fiscal 2026 to net income of $0.15 in fiscal 2027.
Aehr is also attractive from a valuation standpoint, trading at just 14 times earnings. That means it still should have more room to run.
2. ServiceNow
ServiceNow (NYSE: NOW) is on the other end of the spectrum from Aehr Test Systems, as it has had a brutal year, down 42% YTD and 56% over the past 12 months. It is now trading near a 52-week low, but it looks ready to move higher.
The company sells AI-enabled software that helps organizations manage their IT, operations, human resources, and customer service functions. The stock's high valuation and overblown concerns about AI usurping its usefulness caused it to tank earlier this year. But it dropped again after its first-quarter earnings in April, despite a 22% year-over-year revenue gain and earnings beat.
Advertisement
The Q1 concern was over a 75-basis-point hit to ServiceNow's subscription revenue due to delayed closing on several large contracts in the Middle East related to the war in Iran. While it created a near-term headwind, ServiceNow expects them to close later in the year, and it actually raised its subscription guidance for 2026 to a range of 22% to 22.5%, up from 20.5% to 21%.
It also has remaining performance obligations (RPO), or contracts in the pipeline, of $27.7 billion, representing 25% year-over-year growth. In addition, ServiceNow anticipates long-term revenue acceleration from its April acquisition of cybersecurity firm Armis, despite near-term profitability headwinds.
The April sell-off may have been a knee-jerk reaction to delayed Middle East contracts or earnings headwinds, but it did bring down the high valuation even more. The stock is now trading at 21 times forward earnings and has a five-year PEG ratio of 0.88, which suggests it is undervalued based on its long-term earnings expectations.
At the time of this writing, some 90% of analysts rate ServiceNow stock a buy, with a median price target of $137.50 per share, suggesting 57% upside.
These aren't the two best AI stocks on the market, but they are two somewhat overlooked stocks that investors should keep an eye on this month.
Should you buy stock in Aehr Test Systems right now?
Before you buy stock in Aehr Test Systems, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Aehr Test Systems wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $472,744!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,353,500!*
Now, it’s worth noting Stock Advisor’s total average return is 991% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of May 14, 2026.
Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia, Palantir Technologies, and ServiceNow. The Motley Fool has a disclosure policy.
Source: “AOL Money”
