2 Top Bargain Stocks Ready for a Bull Run

Spotting a bargain in the stock market isn't as easy as it looks. There's a difference between "cheap looking" and cheap. A rock-bottom price-to-earnings ratio, for example, isn't enough on its own to make a stock a bargain. If earnings are set to tumble, ratios and metrics won't tell you the whole story.

Two stocks that look like genuine bargains, based on their long-term potential rather than their current results, are semiconductor giant Intel (NASDAQ: INTC) and video game engine developer Unity (NYSE: U). Both companies are going through turnarounds, and improving investor sentiment could drive major rallies this year.

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An outsider CEO takes charge

Shares of Intel have been surging ever since the company announced that Lip-Bu Tan, a semiconductor industry veteran who previously quit Intel's board of directors over disagreements on strategy, would be the company's next CEO. While Intel's big-picture strategy will likely remain largely unchanged with a focus on both its own products and its foundry business, the company is set for a shakeup.

In the foundry business, Tan is reportedly planning to aggressively go after new customers and provide the level of customer and technical service required to truly compete with TSMC. Intel has won a few high-profile customers for its foundry, including Microsoft and Amazon, and manufacturing tests are currently being run by Nvidia and Broadcom.

Outside of the foundry, Tan is likely to cut jobs as he targets a bloated layer of middle managers. There were no meaningful job cuts under previous CEO Pat Gelsinger until late 2024, not long before Gelsinger was forced out. By that time, Intel was already struggling on multiple fronts.

Tan could also revive Intel's artificial intelligence (AI) chip efforts. The company's Gaudi AI chip family failed to gain much traction, and Intel essentially exited the AI chip business before Tan was appointed CEO. AI accelerators represent an enormous market opportunity that Intel has almost completely missed out on.

It will take time for Intel's results to improve, but the story could get better quickly as Tan takes charge. A restructuring that removes middle management would likely be viewed as a positive step, and even a single large-customer win for the foundry business could convince investors that Intel is on the right track.

While Intel stock has bounced back a bit, it's still valued barely higher than its book value. On that basis, the stock has rarely been cheaper. Intel's turnaround is a multiyear story, but the stock could soar in the near term if Tan can prove to skeptical investors that Intel has a viable path forward.

Staging a comeback

Video game engine developer Unity is showing signs of life as it pulls itself out of a deep hole. Under new CEO Matthew Bromberg, Unity is working to fix relationships with developers, launch AI-powered features, and rebuild its advertising business. The company is still in the process of exiting non-core businesses, something that started as part of a company reset before Bromberg took the helm. For that reason, total revenue tumbled in 2024.

Unity has abandoned a misguided attempt to extract additional revenue from developers via a fee based on the number of game installs. This type of fee could have worked, but the company's poor communication and unclear terms led to a developer revolt and the eventual ouster of former CEO John Riccitiello.

The company is now focused on its subscription business, and recent price increases for large customers are showing positive results. Subscription revenue was up 15% year over year in the fourth quarter.

Unity is also working on various AI features that integrate into the Unity game engine. These features are aimed at content creation, as well as running AI models at runtime. While it's still in the early days of Unity's AI efforts, AI-powered features could create additional revenue streams for the company.

In the advertising business, Unity is working on its new Vector AI platform. The company will begin migrating to Vector this quarter, although the platform is still a work in progress, and it will take time for any benefits to materialize. The goal is to deliver better results for advertisers through superior data analysis, self-learning AI models, better targeting, and improved insights.

Unity stock has tumbled nearly 90% from its all-time high. The company is unprofitable, and revenue is depressed, although it does produce solid free cash flow.

Unity's value doesn't come from its current results -- it comes from its future potential. The company's video game engine is widely used across the industry, and the advertising business has a tremendous amount of untapped potential. As the story at Unity starts to improve this year, the stock could bounce off its lows in a big way.

Don’t miss this second chance at a potentially lucrative opportunity

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*Stock Advisor returns as of March 17, 2025

Timothy Green has positions in Intel. The Motley Fool has positions in and recommends Intel and Unity Software. The Motley Fool recommends the following options: short May 2025 $30 calls on Intel. The Motley Fool has a disclosure policy.