Enterprise software developer MicroStrategy (MSTR -9.94%) has been crushing the broader stock market recently. The stock gained 359% in 2024, rising a total of 2,370% in five years on the morning of Jan. 6. The company's all-in focus on Bitcoin (BTC) is paying off, and MicroStrategy is better viewed as a cryptocurrency bank of sorts than as a software business.

At the same time, MicroStrategy's stock is swaddled in risks. A Bitcoin price drop would be bad news for this company, especially if it lasts for a long time. It's also hard to pin a proper market value on the stock, because it doesn't calculate profits or even top-line sales in the same way as most companies. Most investors prefer more traditional stocks and business models, and for good reason -- MicroStrategy is a promising but unpredictable investment.

But there's also an artificial intelligence (AI) boom going on. Tomorrow's biggest winners may very well be found among the companies building unique and powerful AI platforms today. On that note, let me show you a couple of great AI pioneers with a milder risk profile than MicroStrategy.

IBM: The forgotten AI giant

Wall Street has started to wake up to the AI expertise of International Business Machines (IBM 0.58%). IBM's stock is up 39% over the last year and its valuation is almost reasonable at this point. The price to free cash flow (P/FCF) ratio is up to 17.5. That's a sharp increase from the 11.0 reading seen as recently as the fall of 2022.

But the stock still looks undervalued to me. Big Blue's business is very cyclical, because of the heavy revenue-generating value of its mainframe systems. These are refreshed about once every two years, and the next generation of mainframes is due to hit data centers in 2025. Featuring the new Telum II AI accelerator chip, these systems have been built with machine learning and large language models (LLMs) in mind.

So IBM's recent results reflect the trough level of a mainframe-cycle downswing, to be followed by another upswing later this year. IBM's AI expertise is unrivaled and I expect widespread interest in its latest and greatest AI-engine systems.

That's on top of a thriving AI software and service business. The recently launched watsonx platform, which delivers business-ready generative AI tools, has a $3 billion backlog of software and consulting orders -- up from $2 billion three months earlier.

Long story short, I expect IBM to thrive in the enterprise-class AI market. The addition of AI-oriented mainframes should accelerate the company's growth in the artificial intelligence sector. And I already mentioned the modest stock price. This is one way to benefit from the high-octane AI boom without losing sleep over valuation and market risks.

Micron: AI machines need a lot of memory

Speaking of cyclical industries, I highly recommend memory-chip maker Micron Technology (MU 2.67%).

It's no secret that AI systems require a lot of computer memory. Modern AI accelerator cards come with multiple terabytes of high-speed SDRAM. Supercomputers built to train LLMs use thousands of these cards. Moreover, smartphones with AI features are shipping with significantly more memory than the last generation. And I'm just talking about the high-speed SDRAM chips so far; Micron is also a leading provider of long-term flash memory storage chips.

So this company may not be an AI expert, but its products are absolutely crucial for the systems and devices that implement AI technologies. In response, Micron is expanding its leading-edge chip manufacturing facilities in Virginia and Singapore to take advantage of the surging chip demand.

"Micron is extraordinarily well-positioned to leverage this long-term growth opportunity, which has the potential to transform the dynamics of our business," CEO Sanjay Mehrotra said in last month's first-quarter earnings call.

Furthermore, Micron's product mix is shifting away from older and lower-margin chips in the legacy category as buyers with AI ambitions prefer the fastest and most effective high-end products. That's good for Micron's profit margins as the AI boom plays out.

Coming back from a deep downturn, Micron is barely profitable today and its profit-based valuation ratios look ridiculously high. But if you base your calculations on forward-looking metrics, Micron's stock trades at 8.8 times next-year earnings estimates. That arguably an even greater bargain than IBM.

I'd much rather tap into the AI surge with affordable Micron and IBM shares than make a risky Bitcoin bet via MicroStrategy's high-priced stock.