For the past few months, Wall Street has been focused on cloud computing and artificial intelligence (AI). Companies in these sectors have seen their share prices rise substantially, even with slowing or sometimes negative growth, due to speculation about what AI could do in the future. While I certainly agree that AI could change a lot a decade or so from now, I would not pay $280 for a share of NVIDIA (NASDAQ:NVDA) with its current financials.

Likewise, this tunnel vision on the AI and cloud computing craze has created some interesting opportunities in other stock market sectors. Some businesses with excellent potential, booming financials, and promising outlooks remain criminally under-appreciated. I believe investing in these sleeper stocks right now is a better idea than making speculative and expensive investments in hotter stocks.

Here are three such stocks:

Clearfield (CLFD)

Clearfield (NASDAQ:CLFD) is a telecom company specializing in fiber optics. It was among the hottest stocks in the pandemic era, returning 1000%-plus gain from trough to peak. However, the stock is down nearly 52% year-to-date, despite the company’s strong position. In my opinion, the selloff is unjustified as there aren’t any cons big enough to justify CLFD trading just 11x forward earnings.

For starters, the revenue growth rate has been near a blistering 70% for the past few quarters, while its 3-year EBITDA growth rate stands at an eye-watering 107%. That’s better than 98.4% of its peers. The company also has very little debt, while its net margin, in particular, is a very impressive 17.4%. Naturally, this is among the strongest picks among analysts and insiders. The average price target here has a 147.6% upside potential. Criminally undervalued!

Luminar Technologies (LAZR)

Luminar Technologies (NASDAQ:LAZR) specializes in vision & LiDAR for self-driving electric vehicles (EV). The company ran hot in early 2021, but has since been put on the back burner due to the electric vehicle mania slowing down over the past year. As a result, LAZR stock has bled nearly 84% from its peak and has a short interest of 26.9%. Indeed, there is significant bearish sentiment here, but making a contrarian bet on this stock will likely pay off due to a few key metrics.

First, the company has substantial sales growth. It expects triple-digit revenue growth for the next five years and hopes to double its revenue this year. Analysts believe growth will reach 205.6% by 2024.

Second, EV expansion in China is creating significant demand for LiDAR technology. The Street is taking notice of this demand, and coupled with the company’s already existing partnerships with big-name auto companies in Western countries, sales will likely accelerate. Luminar already has a considerable $3.4 billion backlog, expected to reach $4.4 billion this year.

Snap Inc (SNAP)

While many social media tech companies like Meta Platforms (NASDAQ:META) delivered robust gains this year, Snap Inc (NYSE:SNAP) has not seen a breakout. The Snapchat platform has a daily active user count of 375 million, increasing much faster than most of its peers. However, the decline in ad revenue meant that its average revenue per user remained lower than its competitors. For example, Meta’s ARPU was almost $11 in Q4, against Snap’s $3.47. This doesn’t bode well with Wall Street’s move toward cash-generating companies.

Nonetheless, I believe the stock is too cheap at this range, considering there is much more room for Snapchat’s growth, especially once ad revenues recover. It also enjoys a demographic edge, with many younger individuals preferring to use Snapchat. At the same time, its largest competitor TikTok faces a ban in many countries.

For now, the company needs to focus on capitalizing on its expanding user base and bringing back the revenue growth it had throughout its history. That’s achievable in the long term, as ad revenues will inevitably bounce back.

On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.