Even after the recent pullback in the major U.S. market averages, stocks still seem fully priced, especially those with considerable exposure to the generative artificial intelligence (AI) boom. Indeed, it seems like every company wants to bring on some of the AI hype. And though effective monetization of such technologies may be many quarters (or even a few years in the case of certain firms) away.

Additionally, there’s no telling which stocks stand to gain the most from the AI boom. Undoubtedly, you could bet on the market’s high-flying obvious AI winners, but at what cost?

The premiums on the AI top dogs are eventually going to surpass their fair value. Unfortunately, it’s hard to tell when the time comes and what kind of plunge investors who overpay will be in for.

As the second quarter weighs on overheated tech plays, I think a return to value investing could be in the cards. Undoubtedly, when investors forget about risk and freely pay up for difficult-to-value companies based solely on the excitement factor, it can pay dividends to take a step back and do the opposite.

Right now, there are numerous market bargains that may be able to shrug off the market’s pullback and surge higher over the coming months and quarters. And in this piece, we’ll check out two forgotten names that could be ready to impress once again as they inch closer to their 52-week lows.

Spin Master

Spin Master (TSX:TOY) stock has a pretty underwhelming multi-year chart. The stock has seen more than its fair share of ugly tumbles. And though there have been spikes and periods of flat-lining (flat performance is typical for many forgotten mid-cap Canadian companies), I think TOY stock stands out as one of the most underestimated and perhaps undervalued names in the TSX Index’s mid-cap universe. With a $3.2 billion market cap, it’s easy to overlook Spin’s growth prospects as it looks to compete with some heavyweights in an industry that isn’t doing all too well right now.

Indeed, the toy market has been a tough place in recent years. But that doesn’t mean Spin Master doesn’t have room to innovate and outdo its rivals. As the company readies a new roster of toys well ahead of the 2024 holiday season, perhaps investors may wish to pick up a few shares today before investors begin to respect the innovative line-up of new toys that may be able to outsell some of the offerings by Spin’s top rivals.

Spin’s president, Doug Wadleigh, mentioned his firm’s focus on “disruptive toy innovation.” It’s this innovative ability that could lead to meaningful market gains, even as the industry continues to feel the weight of headwinds.

At 15.7 times trailing price to earnings, I believe Spin’s innovative talent to be discounted.

Fortis

Fortis (TSX:FTS) is a pretty well-known utility play, especially among Canadian retirees. After slipping once again, the stock goes for $52 and change to go with a 4.55% dividend yield. What’s dragging the $25.8 billion utility down? A combination of high rates and a lack of enthusiasm over the firm’s predictable but unsurprising portfolio of growth projects.

As market volatility rocks markets once again, though, look for FTS stock to begin to inch higher as it looks to move under its own weight. At 16.9 times trailing price to earnings, FTS stock is on the cheap side of its historical range. I think it’s a great buy right here before defensive dividend investing comes into style again!