2 Top Bargain Stocks Ready for a Bull Run

Taiwan Semiconductor Manufacturing (TSMC) trades around 22x forward 2026 EPS but stands out as the dominant advanced-node foundry with high yields, strong pricing power (reported 2026 node price increases of 3–10%), imminent 2nm production priced 10–20% above 3nm, and a projected mid-40% CAGR in AI chip demand through 2029—placing it squarely to benefit from hyperscaler AI infrastructure spending regardless of GPU vs ASIC outcomes. GitLab (GTLB) is trading below 6.4x 2026 price-to-sales despite being profitable with ~90% gross margins, roughly $1.2bn cash and no debt, 29% revenue growth last quarter, 121% dollar-based net retention, a 31% rise in remaining performance obligations and a move to hybrid seat-plus-usage pricing alongside its Agent Duo AI tooling to capture increased developer productivity. The article frames both names as out-of-favor yet high-quality ways to gain differentiated exposure to secular AI demand, with valuation compression appearing to overstate near-term risks.

Analysis

Taiwan Semiconductor Manufacturing (TSMC) trades at roughly 22x forward 2026 analyst EPS yet is presented as the dominant advanced-node foundry with high yields and close collaboration with chip designers; the company projects AI chip demand will grow at a mid-40% CAGR through 2029, giving strong visibility into revenue mix. TSMC is reported to have sustained pricing power with planned 2026 node price increases of 3%-10% and an upcoming 2nm node priced 10%-20% above 3nm, positioning it to capture hyperscaler AI infrastructure spend regardless of the GPU-versus-ASIC outcome. GitLab is described as materially cheaper on fundamentals—below 6.4x 2026 price-to-sales—while being profitable with ~90% gross margins, ~$1.2bn cash, no debt, 29% revenue growth last quarter, adjusted EPS up 60%, FCF >4x, 121% dollar-based net retention and a 31% rise in remaining performance obligations. The market concern that seat-based pricing could be disrupted by AI agents is noted, but GitLab’s Agent Duo and a shift to hybrid seat-plus-usage pricing are positioned as both offensive and defensive responses; execution of the pricing change and continued seat expansion are key risks to monitor.

Key Decisions for Investors

• Consider initiating or adding to TSMC exposure as a core AI-infrastructure play given 22x 2026 EPS, mid-40% AI demand CAGR guidance and visible pricing power, but size positions to reflect execution risk around the 2nm ramp and node price realization
• Accumulate GitLab selectively because sub-6.4x 2026 price-to-sales, ~90% gross margins, clean balance sheet and strong recent revenue/FCF/DBNR metrics suggest upside, while limiting position size until hybrid pricing adoption and Agent Duo monetization are confirmed
• Monitor near-term catalysts and KPIs closely: for TSMC watch 2nm production timelines, realized node price increases and hyperscaler capex trends; for GitLab track dollar-based net retention, remaining performance obligations and usage metrics tied to the new pricing model
• Manage risk with position sizing or hedges given potential re-pricing from macro volatility or execution slippage in node yields for TSMC and pricing transition for GitLab