Global bond yields are broadly elevated as many regions price in further central bank tightening. That puts more focus on companies that can fund themselves through solid cash generation rather than cheap borrowing. When valuations do not fully reflect that cash flow potential, investors may see an opportunity to buy strength at a discount. This article looks at three stocks from the Undervalued Stocks Based On Cash Flows screener that fit that profile.

The three stocks in this article are just a starting sample. The full screen surfaces 816 more companies with equally grounded cash flow stories that are not covered here. To identify and analyze the ideas that best match your own criteria, head straight to the Undervalued Stocks Based On Cash Flows screener.

Bloom Energy (BE)

Overview: Bloom Energy provides on-site solid oxide fuel cell systems that convert natural gas, biogas or hydrogen into electricity through its Bloom Energy Server platform, with long-term service and power purchase agreements that can create recurring cash flows. The company also sells Bloom Electrolyzer units for hydrogen production to a range of customers including utilities, data centers, healthcare and manufacturing groups in the US and overseas.

Operations: Bloom Energy generates about US$3.1b in annual revenue from electrical equipment, with around US$2.9b coming from the United States and roughly US$261 million from other countries.

Market Cap: US$60.1b

Bloom Energy interests investors who care about cash flow because its Bloom Energy Servers are often sold with long-term service and PPA contracts that support recurring, contract-backed cash inflows. The stock currently trades below the Simply Wall St DCF estimate of fair value. Recent record quarterly revenue above US$1b, rising profitability with net margins of 7.9% and a growing backlog tied to AI data center customers indicate a business that is converting order momentum into cash earnings. At the same time, heavy reliance on external borrowing, share dilution and a history of one-off losses mean you need to look closely at balance sheet risk and per share cash flow. The combination of strong contracted demand and funding or volatility risks is what makes Bloom a candidate for deeper analysis by value-oriented investors focused on cash flows.

Bloom Energy’s cash backed contracts and record quarterly revenue can look like only half the story. Get the full picture with the 3 key rewards and 4 important warning signs (1 is major!) that could shift how you view its future.

Broadcom (AVGO)

Overview: Broadcom is a large digital infrastructure company that designs high performance chips and runs a sizeable Infrastructure Software business built around VMware Cloud Foundation, cybersecurity and mainframe software, which together help enterprises move, store and secure data. Those software suites sit alongside Broadcom’s networking and custom silicon products and are an important source of recurring subscription and maintenance cash flows.

Operations: Broadcom generates around US$27.7b in revenue from Infrastructure Software and about US$47.8b from Semiconductor Solutions, including intellectual property licensing.

Market Cap: US$1,706.8b

Broadcom attracts attention in this cash flow focused screener because its VMware and Infrastructure Software units generate high margin, recurring revenue that supports DCF based valuation work. Its networking and custom AI chips add long term demand visibility through multi year cloud and AI infrastructure deals. The stock currently trades about 14.5% below the Simply Wall St fair value estimate, even with net margins around 38.8% and return on equity near 33.4%, which signals efficient cash generation. The other side of the story is the heavy use of debt and large AI related financing commitments, plus recent insider selling, which can increase risk if credit conditions tighten. For investors who want exposure to AI infrastructure but prefer cash flow from software subscriptions rather than one off hardware cycles, Broadcom is worth a closer look.

Broadcom’s mix of high margin software cash flows and AI chip demand can look like a powerful combo that the market has not fully priced in yet. Get the full story with the 4 key rewards and 2 important warning signs

Super Micro Computer (SMCI)

Overview: Super Micro Computer builds high performance, modular server and storage systems for data centers, with a strong focus on liquid and air cooled AI and high performance computing racks that can be repeatedly ordered as customers expand their AI capacity. Alongside these AI and GPU centric systems, it sells broader server, storage, edge and management software solutions plus rack level design, deployment and support services.

Operations: Super Micro Computer generates about US$39.1b in revenue from developing and providing high performance server solutions.

Market Cap: US$22.8b

Super Micro Computer attracts attention in this cash flow focused screen because its AI and high performance computing servers and rack scale Data Center Building Block Solutions are tied to large, repeat orders from cloud, enterprise and sovereign AI projects. This interest is supported by a reported record backlog above US$60b and management guidance that AI could exceed 80% of revenue. At the same time, investors need to weigh margin volatility, heavy exposure to a few big customers and the risk that intense AI server competition or delayed chip cycles could strain cash conversion. For anyone tracking how AI infrastructure spending might support future cash flows while the stock trades below a DCF based fair value estimate, Super Micro Computer may be a notable company to watch.

Super Micro Computer’s accelerating AI server story and reported US$60b backlog only tell part of the picture. See how those orders tie into cash, margins and concentration risk in the 4 key rewards and 2 important warning signs (2 are major!)

Seeking Alternatives Before The Crowd Moves

Fresh opportunities can move from quiet to flying once momentum builds. Use these focused screens to spot potential breakouts while it matters and while they remain under the radar. Consider acting before they become widely followed.

• Target companies with resilient cash generation and lower risk scores by scanning the carefully filtered 74 resilient stocks with low risk scores before others focus on more stretched stories.
• Look for potentially mispriced growth by reviewing the hand picked 18 high quality undiscovered gems that may still be dropping under most radars despite solid fundamentals.
• Track the build out of digital infrastructure by following the curated 55 AI infrastructure stocks list that could benefit as spending on AI hardware and data pipelines gains momentum.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.