What are the cheapest megacap artificial intelligence (AI) stocks to buy in 2025? The answer depends on your definitions.

We can all probably agree that a megacap stock is any stock with a market cap of at least $200 billion. However, defining the cheapest AI stocks in that group is more challenging. The list will be different based on which valuation metric we use.

Investors could also disagree about which stocks qualify as AI stocks. For example, does using AI extensively meet the threshold, or does a company need to market AI-related products? Perhaps the greatest area of disagreement will arise when deciding which stocks that meet the cheap, megacap, and AI criteria are good picks to buy this year.

I'll use the price-to-earnings-growth (PEG) ratios based on LSEG's surveys of analysts as my valuation metric. I'll only include companies with major AI-related products and services. Finally, I'll use LSEG's surveys of analyst recommendations and my own opinion about the stocks to determine which are good picks to buy.

With all these definitions in mind, here's my list of the cheapest megacap AI stocks to buy in 2025.

1. Advanced Micro Devices

Advanced Micro Devices (AMD -0.57%) barely makes the megacap threshold with a market cap of around $204 billion. The chipmaker doesn't appear to be all that cheap based on its forward earnings multiple of 24.6.

However, AMD is a bargain if the five-year earnings growth projections of the analysts polled by LSEG are anywhere close to right. The PEG ratio for the stock is a super-low 0.32.

AMD certainly qualifies as an AI stock. The company's chips are used to power AI apps on client PCs and data center servers. AMD's pending acquisition of AI infrastructure provider ZT Systems will further solidify its AI credentials.

But is AMD a good pick for investors to buy this year? I think so. Granted, I don't expect AMD to dethrone Nvidia in the AI chip market. However, the company should have solid long-term growth prospects. The sell-off in recent months appears to be overdone, in my view.

2. Alibaba Group Holding Ltd.

Alibaba Group Holding Ltd. (BABA -0.35%) is another stock that squeaks by to join the megacap club. The Chinese technology company's market cap is a little below $205 billion. But Alibaba is cheap based on multiple valuation metrics.

The tech stock trades at only 8.9 times forward earnings. Its PEG ratio is 0.57, according to LSEG. Even Alibaba's trailing 12-month price-to-earnings multiple of 17.7 is relatively low.

Alibaba is sometimes called the "Amazon of China." Like Amazon, it operates a huge e-commerce platform. The company is also a major cloud services provider, just as Amazon is. The comparisons don't hold up as well when looking at Alibaba's recent growth versus Amazon's, though.

I'm admittedly leery of investing too much in stocks based in China. The country's economy isn't as strong as it used to be. The Chinese government can be unpredictable in its treatment of businesses. However, Alibaba provides key products and services to a large market. The chances of the stock delivering strong long-term returns appear to be pretty good for anyone buying now.

3. Broadcom

If there were "mega megacap stocks", Broadcom (AVGO -0.26%) would be in the group. The semiconductor and infrastructure software company's market cap stands at $1.15 trillion. That's roughly double Broadcom's market cap one year ago.

At first glance, Broadcom's valuation might appear frothy. Its shares trade at nearly 38 times forward earnings. The stock's PEG ratio is only 0.68, though. Analysts clearly expect significant growth from Broadcom over the next few years.

I agree with that optimistic outlook. Broadcom's AI revenue soared 220% year over year in its latest quarter, driven by the company's Ethernet networking products and XPU custom AI accelerators. The acquisition of VMware also opens up new opportunities.