Doug Clinton, the founder and CEO of Intelligent Alpha, joined a discussion on CNBC’s ‘Squawk Box’ on February 12 regarding the state of the tech sector, AI tech race, how heavy AI investments and tariff uncertainty have affected mega-cap tech stocks over the past month. When asked to rate how bad it has been on a scale of 1 to 10, Clinton replied that about 2.5 weeks ago, during what he called “Deep Tech Monday,” it was probably around an 8.5 or 9 due to significant pressure. However, since then, things have calmed down following the earnings reports from hyperscalers like Google and statements from industry leaders such as Sam Altman indicating that the capital expenditure boom in AI will continue.
Clinton emphasized that while they remain bullish on tech overall, not all companies are equally leveraged to AI. For instance, Meta is highly exposed due to its leadership in open-source AI with models like Llama. Google and NVIDIA are also heavily tied to AI advancements. On the other hand, Amazon and Apple might have less exposure compared to other hyperscalers. Interestingly, the iPhone maker recently made a deal with Alibaba to integrate their AI models onto iPhones in China. Regarding tariffs and trade tensions with China, Clinton suggested that while these issues should be monitored for hyperscalers who have significant chip production exposure, he does not believe they will be overly impacted by tariffs due to their limited involvement in import/export activities directly affected by tariffs. Instead of focusing heavily on tariff risks at this point, he believes it’s more important for investors to track how well these companies’ AI products evolve and how customers adopt them.
He also expressed skepticism about a protracted trade war with China under Trump’s negotiation tactics. He noted similarities with recent negotiations involving Canada and Mexico where border policies were adjusted without prolonged conflict over tariffs. While acknowledging potential impacts if tensions escalate significantly, particularly affecting chip producers, Clinton does not foresee this as an immediate concern within the next year. If China were involved in a protracted trade war with the US, it could be very bad for some companies. However, Clinton doesn’t think this scenario is likely because Trump often seeks quick negotiating wins rather than prolonged conflicts.
With this stance being acknowledged, we’re here with a list of the 10 best cheap technology stocks to buy according to analysts amidst Clinton’s bullish sentiment on the sector.
Source: pixabay
Methodology
We used a stock screener to compile a list of tech stocks with a forward P/E ratio of under 15. We then selected 10 stocks that had high average upside potential (over 30%) and were the most popular among elite hedge funds. The stocks are ranked in ascending order of their average upside potential. We’ve also added the hedge fund sentiment for each stock which was sourced from Insider Monkey’s database.
Note: All data is sourced as of February 13.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Cheap Technology Stocks To Buy According to Analysts
10. Seagate Technology Holdings (NASDAQ:STX)
Forward P/E Ratio: 13.74
Average Upside Potential: 31.04%
Number of Hedge Fund Holders: 46
Seagate Technology Holdings (NASDAQ:STX) provides data storage solutions and offers a range of mass-capacity products. These include HDDs, SSDs, and enterprise systems, alongside edge-to-cloud infrastructure solutions via its Lyve platform. The company serves OEMs, distributors, and retailers globally, and caters to diverse storage needs from enterprise to consumer.
Its cloud business is booming due to the massive demand for near-line storage products. Revenue from this segment nearly doubled in FQ2 2025 year-over-year and grew by almost 60% for all of 2024. This growth is tied to increased spending by cloud providers, who are investing heavily in infrastructure to support the growing demand for traditional services and emerging AI applications.
A lot of cloud-driven growth is fueled by the company’s advanced HAMR-based Mozaic platform, which delivers high-capacity drives to major customers. This technology is essential for managing AI’s data explosion, with HDDs storing training datasets and offering cost and environmental benefits. Seagate Technology Holdings (NASDAQ:STX) cloud focus promises future growth.
Following FQ2 results, Benchmark’s analyst Mark Miller upgraded Seagate Technology Holdings (NASDAQ:STX) to Buy with a $120 price target on January 22. Despite potential supply constraints in the March quarter, the sustained cloud demand and AI segment growth are expected to drive performance in H2 FY25 and FY26.
9. Euronet Worldwide Inc. (NASDAQ:EEFT)
Forward P/E Ratio: 9.93
Average Upside Potential: 32.39%
Number of Hedge Fund Holders: 33
Euronet Worldwide Inc. (NASDAQ:EEFT) delivers payment and transaction processing solutions globally. It operates across EFT (Electronic Funds Transfer) Processing, epay, and Money Transfer segments. It provides services ranging from ATM and POS solutions, prepaid mobile top-up and distribution, to consumer money transfer and related financial services. It serves financial institutions, retailers, and consumers.
The company’s EFT segment drove its record Q3 2024 results, delivering double-digit constant currency operating income and adjusted EBITDA growth. This was fueled by a recovery in European travel, with tourism reaching 96% of pre-pandemic levels, which was up 6% year-over-year. Merchant services expanded by adding 4,600+ new merchants. New markets like Albania, Belgium, Mexico, Egypt, the Philippines, and Morocco contributed to growth.
The addition of domestic and international access fees at existing ATMs also enhanced EFT’s profitability. The company emphasized the success of its Ren payment platform and cited a 10-year extension with the Bank of Mozambique and SIMO, where daily transaction volumes have doubled year-over-year. This platform specializes in mission-critical transaction processing and innovative experiences in core switching, issuing, payments hub implementations, and ATM management.
8. Western Digital Corp. (NASDAQ:WDC)
Forward P/E Ratio: 11.17
Average Upside Potential: 33.77%
Number of Hedge Fund Holders: 66
Western Digital Corp. (NASDAQ:WDC) develops and sells data storage devices and solutions globally. Its portfolio spans client devices (HDDs and SSDs for PCs, gaming, and mobile), enterprise solutions (HDDs, SSDs, and platforms for servers and AI workloads), and consumer storage (external HDDs/SSDs, removable cards, USB drives, and wireless products).
On February 12, Wells Fargo analyst Aaron Rakers reiterated a Buy rating on the company with an $85 price target. For this sentiment, rakers cited expected revenue growth from increased data storage demand, AI, and autonomous driving advancements. He projected a total addressable market growth from $65 billion in 2024 to $100 billion by 2030.
The company’s HDD business is booming because of the increasing need for data storage in areas like AI and autonomous driving. In FQ2 2025, HDD revenue hit $2.4 billion, a 9% jump sequentially, and a 76% jump year-over-year. Demand for its high-capacity drives is soaring. The company shipped a record 154 exabytes of nearline HDDs, with growth in exabytes shipped up both sequentially and year-over-year. This, combined with higher average prices per unit, led to record gross margins for the HDD segment.
Parnassus Mid Cap Fund re-initiated a position in Western Digital Corp. (NASDAQ:WDC), believing that its earnings potential is underestimated due to the growth of AI and its attractive valuation. It stated the following in its Q2 2024 investor letter:
“We re-initiated a position in Western Digital Corporation (NASDAQ:WDC), a manufacturer of memory semiconductor chips and hard disk drives, as we believe earnings expectations are far too low. Semiconductors have been another of our most-alpha-generative industries, thanks to the industry’s secular tailwinds and our in-house expertise. Western Digital stands to benefit from the rapid growth of memory-hungry AI applications. The valuation for Western Digital was low relative to its peers, giving us a way to participate in AI at a reasonable valuation.”
7. Dell Technologies Inc. (NYSE:DELL)
Forward P/E Ratio: 12.15
Average Upside Potential: 37.27%
Number of Hedge Fund Holders: 60
Dell Technologies Inc. (NYSE:DELL) provides integrated technology solutions globally and operates through its ISG (Infrastructure Solutions Group) and CSG (Client Solutions Group) segments. ISG offers enterprise-grade storage, servers (including AI-optimized), and networking solutions. CSG provides desktops, workstations, notebooks, and related peripherals. It also offers cybersecurity solutions, financing, and VMware reselling, serving enterprises, public institutions, and SMBs.
Citi analyst Asiya Merchant maintained a Buy rating on Dell Technologies Inc. (NYSE:DELL) with a $156 price target on February 12. Merchant’s optimism stems from improving demand, positive industry event trends, and expected higher AI server margins. The company saw a shift in AI server demand towards Nvidia’s Blackwell architecture in Q3, which impacted short-term shipments as these new products ramped up. Despite this, Dell Technologies Inc. (NYSE:DELL) secured $3.6 billion in AI server orders, which is an 11% sequential increase, and signed 2,000+ enterprise customers for its AI solutions.
It’s also expanding its partnership with CoreWeave, delivering the first Dell PowerEdge XE9712 server racks with NVIDIA GB200 NVL72 to enhance CoreWeave’s AI cloud platform. This collaboration will utilize the company’s liquid-cooled IR7000 racks and AI professional services to optimize CoreWeave’s data center design, combining Dell Technologies Inc.’s (NYSE:DELL) infrastructure with NVIDIA’s technology.
Despite disappointing earnings in H1 2024, the Carillon Scout Mid Cap Fund views the company positively due to its potential for AI-driven growth and strong product offerings. The fund stated the following regarding Dell Technologies Inc. (NYSE:DELL) in its Q2 2024 investor letter:
“Dell Technologies Inc. (NYSE:DELL) was a top contributor despite reporting disappointing first-quarter earnings results, because investors looked through the near-term disappointment and expected strong growth from AI-related servers and personal computers. We expect Dell to participate in the growth of artificial intelligence hardware, especially as enterprises invest more aggressively. We like the company’s depth and breadth of products and services, as well as its focus on keeping costs low.”
6. Sensata Technologies Holding (NYSE:ST)
Forward P/E Ratio: 8.08
Average Upside Potential: 37.45%
Number of Hedge Fund Holders: 31
Sensata Technologies Holding (NYSE:ST) develops and manufactures sensors and sensor-rich solutions, along with electrical protection components, for mission-critical systems globally. Operating through Performance Sensing and Sensing Solutions segments, it provides pressure, temperature, position, and other sensors, as well as electrical protection systems and components. It serves many industries including automotive, industrial, aerospace, and energy.
The company’s Performance Sensing segment, which focuses on automotive and heavy vehicles, is its revenue engine. In 2024, it generated $2.74 billion and held steady despite market contraction. This outperformance, around 350 basis points, is attributed to the company’s market position and winning new business in traditional ICE vehicles. These are vehicles powered by an internal combustion engine (ICE) that burns fossil fuels like gasoline or diesel, as opposed to EVs or other alternative fuel vehicles.
While the broader automotive market struggled, and EV adoption slowed, Sensata Technologies Holding (NYSE:ST) maintained revenue in this segment. Although profit margin dipped slightly due to external factors, the company is positioned to capitalize on the existing ICE market and the growing EV sector.
5. Nice Ltd. (NASDAQ:NICE)
Forward P/E Ratio: 14.22
Average Upside Potential: 45.43%
Number of Hedge Fund Holders: 24
Nice Ltd. (NASDAQ:NICE) provides AI-driven cloud platforms for digital business solutions globally. Its offerings include CXone for customer experience, Enlighten AI engine, smart self-service solutions, and journey orchestration. It also provides solutions for agent enablement, interaction recording, digital evidence management (Evidencentral), and financial crime and compliance (X-Sight, Xceed). It uses AI and analytics for fraud prevention and AML (Anti-Money Laundering) compliance.
The company received a Buy rating from DA Davidson analysts on January 29, with a $225 price target. The analysts cited its strong financials and commitment to AI innovation for this sentiment, highlighting its investment in platforms like CXone and Enlighten. The company’s Q3 revenues were up 15% to $690 million, driven by strong AI tool demand.
Its AI-driven solutions are being adopted across diverse sectors. Fulton Bank recently implemented Enlighten-powered tools like CXone Mpower Copilot, Autopilot, and Expert to enhance customer service through AI-driven self-service and agent support. Beyond contact centers, the company’s AI capabilities are streamlining operations for organizations like the Monterey County District Attorney’s Office, which selected NICE Justice to modernize digital evidence management, becoming the 4th California prosecutor’s office to do so. Similarly, Prosper, a financial services company, partnered with Nice Ltd. (NASDAQ:NICE) for its CX transformation, using solutions like CXone Mpower and SmartReach to improve customer engagement and operational efficiency.
Broyhill Asset Management is bullish on Nice Ltd. (NASDAQ:NICE), and believes that its cloud-based software and AI integration will drive revenue growth as competitors struggle. Here’s what it said in its Q3 2024 investor letter:
“NICE Ltd. (NASDAQ:NICE) develops software to run customer contact centers. The company’s cloud-based software enables the implementation of greater functionality versus its on-premise competitors. Many of these on-premise competitors, which do not offer cloud-based products, have stopped rolling out new features. This has prompted their customers to switch to companies like Nice where they have wider access to new developments. Artificial intelligence is a large part of this shift and of our differentiated view. The market views AI as a threat to Nice’s core operations; we view it as an enabler of additional revenue streams with improved economics.”
4. Leidos Holdings Inc. (NYSE:LDOS)
Forward P/E Ratio: 12.72
Average Upside Potential: 46.15%
Number of Hedge Fund Holders: 34
Leidos Holdings Inc. (NYSE:LDOS) provides services and solutions across the defense, intelligence, civil, and health markets. Through its three segments, it delivers national security solutions, systems integration, IT services for civil agencies, and health information management and R&D services. It serves the US government, international allies, and commercial clients.
Its National Security segment saw growth accelerate to 5.5% in Q4 2024. This was fueled by business development efforts. While the segment’s profit margin dipped slightly in the quarter due to project variations, its full-year margin exceeded expectations. Leidos Holdings Inc. (NYSE:LDOS) anticipates continued profit margin growth in this segment due to repeatable business and higher-margin projects.
For 2025, Leidos Holdings Inc. (NYSE:LDOS) projects total revenue growth of up to 4%, reaching between $16.9 billion and $17.3 billion. The company also forecasts strong profit margins, with an adjusted EBITDA margin in the mid-to-high 12% range, and anticipates further profitability improvements across all its segments.
3. Micron Technology Inc. (NASDAQ:MU)
Forward P/E Ratio: 12.48
Average Upside Potential: 58.16%
Number of Hedge Fund Holders: 107
Micron Technology Inc. (NASDAQ:MU) designs, manufactures, and sells memory and storage products globally. It operates through four business units: Compute and Networking, Mobile, Embedded, and Storage. It provides DRAM, NAND flash memory, and other storage solutions under the Micron and Crucial brands. It serves markets for data centers, PCs, graphics, networking, automotive, industrial, and mobile devices.
Morgan Stanley analyst Joseph Moore lowered the company’s price target to $91 from $98 on February 12, maintaining an Equal Weight rating. Moore cited potential deflationary effects from DeepSeek’s AI innovations and the possibility of increased export controls or reduced spending enthusiasm in the AI sector. Despite this, he remains positive on the semiconductor sector overall.
But Micron Technology Inc. (NASDAQ:MU) is investing heavily in AI-related infrastructure. It has begun construction of a $7 billion High-Bandwidth Memory advanced packaging facility in Singapore, scheduled to begin operations in 2026. This facility, the first of its kind in Singapore, will support growing AI demand and expand the company’s advanced packaging capacity by 2027, creating 1,400 initial jobs with plans to reach 3,000.
It’s also expanding its consumer product line with offerings relevant to AI applications. New additions to the Crucial lineup include the high-speed Crucial P510 SSD and expanded DRAM options, such as the 32GB Crucial DDR5 Pro Overclocking Gaming Memory and the 64GB DDR5 Pro Plug-and-Play Memory. These products offer faster, more power-efficient solutions for various users, including those working with AI-driven applications.
Parnassus Value Equity Fund is positive on the company’s prospects, due to the revenue growth in its memory segments and its advantageous position to benefit from AI-driven demand. It stated the following regarding Micron Technology Inc. (NASDAQ:MU) in its Q2 2024 investor letter:
“Micron Technology, Inc. (NASDAQ:MU) posted fiscal-third-quarter results that met expectations. Micron’s DRAM (dynamic random access memory) and NAND (non-volatile storage technology) segments grew revenue strongly, continuing the company’s recovery from a cyclical downturn last year. We believe Micron is well positioned to capitalize on AI-driven demand for greater memory.”
2. CACI International Inc. (NYSE:CACI)
Forward P/E Ratio: 14.27
Average Upside Potential: 58.54%
Number of Hedge Fund Holders: 38
CACI International Inc. (NYSE:CACI) provides expertise and technology solutions for national security across intelligence, defense, and federal civilian sectors. Operating through Domestic and International segments, it offers digital modernization, C4ISR, cyber, space, logistics, engineering, IT, and mission support solutions to government and commercial clients.
Its core business is serving national security clients, primarily the DoD (Department of Defense), the intelligence community, and DHS (Department of Homeland Security). This segment makes up about 90% of the company’s revenue, which is why FQ2 2025 saw strong year-over-year revenue growth of 14.5%.
CACI International Inc. (NYSE:CACI) excels in modernizing software, networks, and mission systems. It highlighted agile software development programs with government agencies, which demonstrated its ability to deliver results quickly and efficiently. The work of modernizing networks and developing advanced systems for the military further strengthens its position. Its IT service program for the Air Force and Space Force is also a key contributor, which improves efficiency and frees up personnel for other duties. This focus on technology aligns well with government priorities. As a result, the company has raised its revenue guidance for FY25.
Meridian Contrarian Fund remains highly bullish on the company, which is their largest holding. The fund cites its essential role in US defense IT infrastructure and consistent growth over a 10+ year investment period. It stated the following in its Q3 2024 investor letter:
“CACI International Inc (NYSE:CACI) is an IT consultant and provider of mission-critical technology to the U.S. Government and its agencies, which account for nearly 95% of its sales. CACI plays a vital role in modernizing IT infrastructure, systems, and other essential defense needs for the U.S. We have held CACI for over 10 years as the company has consistently grown into a larger supplier to the U.S., and increasingly, to our allies. The company’s stable growth and role as an essential provider of U.S. defense infrastructure were recognized by the market, delivering a solid return for shareholders in the quarter. We maintained our position throughout the period and, as of quarter-end, CACI was the Fund’s largest holding.”
1. Alight Inc. (NYSE:ALIT)
Forward P/E Ratio: 9.79
Average Upside Potential: 65.66%
Number of Hedge Fund Holders: 40
Alight Inc. (NYSE:ALIT) offers cloud-based integrated digital human capital and business solutions globally. Through its Employer Solutions segment, it provides employee well-being, benefits administration, and payroll services leveraging AI. Its Professional Services segment offers cloud advisory and optimization. Its Worklife platform aims to improve employee engagement and drive organizational performance.
Its primary business revolves around its Alight Worklife platform, which offers employee benefits and well-being services. It prioritizes Annual Recurring Revenue (ARR) from long-term contracts as a key indicator of growth. In Q3 2024, the company saw recurring revenue growth improve sequentially, and BPaaS (Business Process as a Service) revenue, a core component of Worklife, grew 19% year-over-year, representing 22% of total revenue.
The company is actively pursuing ARR growth by expanding its client base, securing larger deals, and improving its win rate. It has seen an increase of over 60% in its sales pipeline and double-digit growth in win rates, leading it to expect strong double-digit ARR growth in the latter half of the year.
The company’s first major 2025 update for Worklife, released on February 4, enhances its AI-powered benefits, health, wealth, and absence management solutions. Key improvements include Microsoft Teams integration for seamless access and AI-driven recommendations, an upgraded analytics platform powered by Alight LumenAI, expanded AI automation for claims processing, and broader claim-type support.
While we acknowledge the growth potential of Alight Inc. (NYSE:ALIT), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ALIT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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