The AI trade is carrying on strong as ever, showing no signs of slowing down. For the last three years, a handful of stocks have driven the S&P 500 forward, with almost all of them gaining on the back of AI progress. Consequently, many stocks are facing a severe lack of interest and even outflows, resulting in them losing value.
When Jonathan Krinsky, the Chief Market Technician at BTIG, appeared on CNBC to discuss the AI trade, he mentioned exactly the above and backed it with numbers.
The S&P 500 hit a 52-week high on Friday… and 8% of the actual S&P names are at their 52-week low and that ties the all-time record of late 1999. It’s not just that names aren’t participating at the moment, they’re actually moving lower at this point.
There is clearly a disconnect in the market at the moment, and quite often, the value lies in the areas that are being ignored. One way to unearth this value is to look at the most ignored or worst-performing stocks and see whether professionals are still backing them. If they are, chances are these are strong businesses that will eventually continue their long-term trend. This is why we decided to compile our list of the 10 best 52-week low stocks to buy according to hedge funds.
Our Methodology
To come up with our list of 10 best 52-week low stocks to buy according to hedge funds, we only considered companies that had a market cap of at least $2 billion. These companies are trading between 0% and 5% of their 52-week lows. We also considered how many hedge funds held these companies in their portfolios and ranked them in ascending order of the number of funds holding them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Note: All share price data in the article is as per market close on May 13.
10. Rollins Inc. (NYSE:ROL)
Number of Hedge Fund Holders: 57
Rollins Inc. (NYSE:ROL) reports its Q1 2026 earnings report on April 23. The company reported revenue of $906.42 million, comfortably beating the Wall Street consensus of $894.58 million. The earnings per share came in at $0.24, which met analyst expectations. Overall performance in Q1 was healthy. Moreover, residential services saw the greatest improvement, but commercial, termite, and other services also did well.
On April 27, Rothschild & Co Redburn upgraded Rollins Inc. (NYSE:ROL) to Buy from a previous rating of Neutral. The firm also raised its target price from $51.90 to $66. With the stock price dropping, investors believe the company’s slow growth over the past two quarters will continue for longer, but the firm thinks otherwise. The company’s steady stream of long-term contracts underpins its fiscal 2026 organic growth, the analyst tells investors in a research note. In the short term, however, the stock has already lost a quarter of its value over the last three months.
Rollins Inc. is an international service company that provides pest and termite control services to both residential and commercial customers. The company is based in Atlanta, Georgia, and was founded in 1948 by John W. Rollins Jr. and O. Wayne Rollins Sr.
9. Ecolab Inc. (NYSE:ECL)
Number of Hedge Fund Holders: 62
On May 5, RBC Capital analyst Ashish Sabadra reaffirmed a Buy rating on Ecolab Inc. (NYSE:ECL) and assigned a price target of $337 on the stock. This reflects an upside of 35% from current levels. This positive sentiment followed the company’s earnings report on April 28.
On April 28, Ecolab Inc. posted its first-quarter fiscal 2026 earnings. The company reported a revenue of $4.07 billion for Q1 2026, beating the Wall Street consensus of $4.03 billion. The adjusted Earnings per share came in at $1.7, which met analysts’ estimates.
Going forward, the company expects earnings per share of $2.02 to $2.12 in the second quarter. The growth is expected to strengthen in Q3 and Q4. For the full year 2026, commodity costs are expected to increase in the high single digits. This will impact second-quarter earnings per share growth by a few points.
Ecolab Inc. provides water, hygiene, and infection prevention solutions and services that protect people and critical resources. Its Global Industrial segment offers water treatment and process applications, along with cleaning and sanitizing solutions, primarily for large industrial customers.
8. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 63
On May 7, BMO Capital analyst Keith Bachman maintained his Hold rating on the International Business Machines Corporation (NYSE:IBM) stock. He also set a price target of $270, representing an upside of 21% from here.
From May 4 to May 7, the company held its IBM Think 2026 event, which was centered around agenctic AI, automation, and revamping businesses with AI. Though this has generated significant investor and analyst activity, no analyst has come out with an upward target price revision. Reacting to the event, Morgan Stanley pointed out that IBM was on course to become a full-stack operator of enterprise AI rather than just an AI enabler. In the long run, this impacts both its revenue mix and margins. Erik Woodring of Morgan Stanley said:
While execution and competitive dynamics bear watching, Think 2026 increases our conviction that IBM is carving out a more defensible role in enterprise AI by leaning into its strengths in hybrid infrastructure, data gravity, and trusted deployment,
The firm has an Equal-weight rating on the stock, with a price target of $225. It also pointed out that the company faces tough competition among AI platforms, though it enjoys a healthy standing against hyperscalers thanks to its offerings like Sovereign Core, which is a platform that enables government organizations and those in highly regulated niches to deploy and operate AI sovereign cloud environments.
International Business Machines Corporation operates as an integrated solutions and services provider across Asia-Pacific, the Americas, the Middle East, Europe, and Africa. The company operates in the Infrastructure, Software, Financing, and Consulting segments.
7. Toast, Inc. (NYSE:TOST)
Number of Hedge Fund Holders: 68
Toast, Inc. (NYSE:TOST) announced its Q1 2026 earnings report on May 8. The company reported a revenue of $1.63 billion, matching the Wall Street consensus. Management believes the company is off to a good start, with gross profit streams up 27%, driven by 7,000 new net location additions. The company not only raised its outlook but also saw positive analyst sentiment after earnings.
On May 12, Jason Kupferberg, an analyst at Wells Fargo, reiterated a Buy rating on Toast, Inc. and assigned a price target of $36. The price target suggests a further 61% upside from the current levels. Going forward, the company expects total subscription and fintech gross profits to grow 22% to 24% year over year. For the full year 2026, the company has raised its revenue guidance to 21%-23%. On a positive note, the company is making plans to improve and grow over the next 5 to 10 years. The software company believes it can maintain its 40% EBITDA margin.
Toast, Inc. is an American company that offers financial technology solutions and restaurant management software. It provides a cloud-based, all-in-one digital technology platform designed for the restaurant industry, offering software and financial technology solutions that help restaurants across the point of sale, payments, operations, digital ordering and delivery, marketing and loyalty, and team management.
6. Aon plc (NYSE:AON)
Number of Hedge Fund Holders: 70
On May 11, Keefe Bruyette raised its price target on Aon plc (NYSE:AON) to $404 from $401 and reaffirmed an Outperform rating on the stock. The firm’s adjusted price target suggests a further 29% upside from the current levels. Apart from Keefe Bruyette, Morgan Stanley analyst Bob Huang cut his price target on Aon plc (NYSE:AON) from $390 to $380 while keeping an Overweight rating on the shares.
On May 01, the company announced its Q1 2026 earnings report. It reported revenue of $5 billion, beating the Wall Street consensus of $4.98 billion. This represents 6% increase in revenue year over year. The earnings per share came in at $6.48, which comfortably beat estimates of $6.36. Despite the Middle East conflict, sales in that region are growing but remain a small share of the overall business. However, if the conflict persists, it could have some impact on the financial performance.
Aon plc (NYSE:AON) is a professional services company operating across the United States, the United Kingdom, the Middle East, the rest of the Americas, the rest of Europe, Asia-Pacific, Ireland, and Africa. The company operates in the Human Capital and Risk Capital segments.
5. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 71
On May 11, after OpenAI announced it was launching an OpenAI Deployment Company, shares of several consulting companies fell. However, UBS expressed a positive opinion regarding Accenture plc (NYSE:ACN) stock, with a target price of $320 and a Buy rating. Reacting to these developments, the company’s stock declined nearly 3%, whereas its market competitors, such as Cognizant Technology and Infosys, fell by 5% and 4%, respectively.
Moreover, OpenAI is acquiring AI consulting and engineering firm Tomoro. As a result, 150 experienced engineers and deployment specialists are expected to join the research and deployment company. Even with this acquisition, OpenAI lacks the massive, global workforce needed to run large projects on its own. This makes Accenture stand out in the technology and consulting market with over 700,000 employees. UBS analysts led by Kevin McVeigh remarked,
While we acknowledge sector concerns, recent M&A activity shows how new entrants NEED incumbent skills + deployment capability to implement.
Despite the uncertainty, there was one positive on the partnership front. On May 7, Accenture plc (NYSE:ACN) and the Women’s Tennis Association announced a new multi-year partnership, focused on enhancing player experience and the future of women’s tennis. As an official partner, Accenture will upgrade the company’s technology and modernize its digital systems.
Accenture plc (NYSE:ACN) is a Dublin, Ireland-based company that offers technology, consulting, operations, industry X, and various other services. The company serves industries including retail, financial services, healthcare, technology, communications, and energy. It helps businesses manage technology systems, adopt advanced solutions, and improve operations.
4. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 72
On Apr 30, JPMorgan analyst Vivek Juneja reiterated his Hold rating on Wells Fargo & Company stock. Interestingly, he also lowered his price target on the stock, bringing it down to $86.5 from $91. The stock fell from $82 to $75.6 over the next few days until another analyst, Keith Horowitz of Citi, reiterated his Hold rating on Wells Fargo & Company. The lack of positive triggers means the stock is now back near its June 2025 lows, resulting in almost zero returns over the last 12 months.
The risks causing the lackluster performance were evident on the recent earnings call on April 14. Management feels less-affluent customers will continue to stay under pressure due to rising energy costs. The one-time loss from a fraud-related event also soured sentiment, though the company carried out an intensive review through independent teams to mitigate the risk. Net Interest Margins are expected to continue their downtrend, with senior EVP & CFO Santomassimo warning about margin compression in the ongoing quarter:
And lastly, the impact of lower interest rates. When we provided our full-year guidance last quarter, we anticipated some margin contraction for these reasons, and I would expect additional margin compression next quarter.
Wells Fargo & Company is a leading financial services company, providing diversified banking services across the Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management segments. The company is based in San Francisco, California, and was founded in March 1852.
3. Builders FirstSource, Inc. (NYSE:BLDR)
Number of Hedge Fund Holders: 74
Builders FirstSource, Inc. (NYSE:BLDR) reported its Q1 earnings report on April 30. The market reacted negatively to the report, driven by a significant drop in earnings per share and profitability. The company reported revenue of $3.3 billion, down 10.1% from Q1 2025. Within the span of just one week, the company has seen three downward target price revisions. UBS lowered its price target on the firm to $122 from $143. Raymond James did the same, lowering its price target from $140 to $100. Deutsche Bank also came down to $81 from its prior target price of $102.
On May 5, BMO Capital lowered the firm’s price target on Builders FirstSource, Inc. to $93 from $100 and kept a Market Perform rating on the stock. On a positive note, the analyst believes that the company is doing well against a tough housing backdrop, with encouraging signs of stabilization in trusses and Engineered Wood Products.
Builders FirstSource, Inc. supplies building materials and construction services. It mainly serves residential construction, remodeling, and repair projects. The company provides manufactured products, manufactured and semi-custom modular homes, Ready-Frame, manufacturing, assembly, and other products and services.
2. The Progressive Corporation (NYSE:PGR)
Number of Hedge Fund Holders: 82
The Progressive Corporation (NYSE:PGR) reported its Q1 2026 earnings report on May 4. The company reported revenue of $20.97 billion, beating the Visible Alpha consensus of $20.72 billion. This represents 8% year over year growth in Q1. Net premiums rose to $23.6 billion, which is above the anticipated consensus of $22.21 billion. The company’s total number of active policies grew by 9%, rising to 39.57 million from 36.29 million. However, this total fell slightly short of the 39.58 million that financial experts had expected. CEO Tricia Griffith remarked,
Growth in the Property segment was partially offset by intentional actions taken to moderate growth in homeowners’ products.
The company not only raised its outlook but also saw analyst activity after earnings. On May 6, Meyer Shields, an analyst at KBW, reaffirmed a Hold rating on The Progressive Corporation and set a target price of $208. This reflects an upside of 6% from here on.
The Progressive Corporation is an insurance company operating across the United States. The company offers a wide range of commercial and personal insurance products. Its services include auto, home, RV, renters, motorcycles, boats, trucks, and small business insurance.
1. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 82
On May 8, Wells Fargo downgraded NIKE, Inc. (NYSE:NKE) to Equal Weight from Overweight and lowered its price target from $55 to $45. This still reflects an upside of 6.4% from here on. Wells Fargo believes the company is facing stiff competition due to market oversaturation. The broader shift away from athletic apparel has created a negative investor sentiment across the largest footwear company globally.
Additionally, the company is facing a class action lawsuit. NIKE, Inc. charged its consumers higher prices to cover tariffs, but hasn’t returned that money now that the tariffs have been ruled out. Similarly, the Beaverton, Oregon-based company is also facing similar lawsuits after the US Supreme Court ruled against the tariffs imposed by the Trump administration. In its defense, the company disclosed that Trump’s tariffs forced it to pay roughly $1 billion in import levies. As a result, the athletic giant increased the prices of some footwear and apparel by $5-$10 and $2-$10.
NIKE, Inc. operates as a global sportswear company that develops, designs, markets, and sells casual and athletic footwear, equipment, apparel, and accessories. The company’s portfolio consists of brands such as NIKE, Chuck Taylor, One Star, Jordan, and Jumpman.
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