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Since the markets tanked in early April, they have been on an incredible run. Since it dipped below 5,000 to 4,982 on April 8, the S&P 500 has soared a ridiculous 30%.

Now, the S&P 500 is up almost 10% year-to-date and it hit an all-time closing high on August 13 at 6,466. The Nasdaq Composite also hit an all-time high on August 13, closing at 21,713. It is up 12% YTD.

The Dow Jones Industrial Average is not quite there, but it could be by the end of the week. It closed at 44,922 on August 13, less than 100 points off the all-time high of 45.014 set on December 4, 2024.

With the surge in stock prices, valuations have soared as well. The P/E ratio of the S&P 500 is now up around 30 – the highest it has been since 2021, Further, the P/E ratio of the Nasdaq 100 has skyrocketed to a record high of 42 – even higher than it was at the end of 2024 after two straight years of huge gains.

While these type of returns are great for the portfolio, it leaves investors wondering where to invest new assets. Do you buy high and hope they go higher, or do you look for some bargains that are still out there? If you’re in the latter camp, here are two stocks that are relatively cheap with significant upside.

Berkshire Hathaway

The House that Warren Buffett built, Berkshire Hathaway (NYSE: BRK-B) is going through a succession period, with Buffett planning to step down at the end of 2024. That is part of the reason that the stock price has meandered along this year, up 5%. The conglomerate has also had a couple of difficult quarters. In Q1, operating earnings dropped 14% due mainly to higher underwriting costs tied mostly to the California wildfires.

In Q2, Berkshire saw a slight year-over-year drop in operating earnings due primarily to a $3.76 billion impairment caused by a drop in value of one of its holdings, Kraft-Heinz – a rare miss for Buffett.

Investors shouldn’t be too concerned about the lackluster start to the year or the transition to new CEO Greg Abel. Abel has been groomed for this role for years, learning under Buffett, who will remain on board chair. The culture there is so strong that the investment philosophies and execution that made it so successful should continue.

Plus, the company has a record amount of cash on the sidelines, about $340 billion, that it is waiting to deploy in new investments. It has more in cash than it has invested in its portfolio – which is about $260 billion. Finally, the stock is still a bargain, trading at 16 times earnings. Berkshire Hathaway hasn’t been a bad investment for almost 60 years and it certainly looks attractive at this valuation.

Micron Technology

It is hard to believe that one of the leading AI chip stocks, Micron Technology (Nasdaq: MU) is still a bargain. It was this cheap last year, when we recommended it – and this year, the stock has gained some 48%.

The AI stock, which makes memory and storage chips for computers, smartphones, and data centers, has been investing heavily in its high bandwidth chips for data centers. It is in this growing data center market where Wall Street analysts see Micron as well-positioned to gain market share.  

Even with the huge jump in the stock price this year, Micron remains a great deal, with lots of upside. The stock recently got several price target upgrades, citing its improved pricing and strong execution. Analysts at JP Morgan raised their target by $20 to $185 per share, calling it well-positioned for growth in 2026, while Deutsche Bank and Mizuho each boosted it to $155 per share.

The median price target is $151 per share, which would suggest a return of 22%. If it hit $185 per share, that would be represent a gain of 49%.

And, like Berkshire Hathaway, it is undervalued with a P/E ratio of 22 an a forward P/E of 9. Both of these stocks look like great values right now.

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