Grand View Research reported that the global IT services market size was estimated at $1.50 trillion in 2024 and is projected to reach $2.59 trillion by 2030, at a CAGR of 9.4% from 2025 to 2030. The shift towards remote and hybrid work models has significantly impacted the demand for IT services. The new structure has created an increased need for IT solutions that support employees working outside traditional office environments. Consequently, IT companies are experiencing a surge in demand for the tools and infrastructure necessary to facilitate remote and hybrid work.
Gartner analysts highlighted that one of the critical IT themes emerging this year is Digital Ethics. It dictates how users should conduct themselves online, on social media platforms, and during the processing of personal information. The goal of digital ethics is to ensure security and prevent data leaks, thereby fostering a responsible and trustworthy digital environment. As technologies, particularly AI, become increasingly integrated into daily operations and personal lives, the adherence to clear ethical guidelines becomes essential to eliminate risks like the misuse of personal data and algorithmic bias.
That being said, we’re here with a list of the 10 cheap IT stocks hedge funds are buying.
A high-rise office building, its staff busy at work providing cybersecurity services.
Methodology
We sifted through the Finviz stock screener to compile a list of the top IT stocks that had a forward P/E ratio under 20 as of July 9. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q1 2025. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 1000 elite money managers.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Cheap IT Stocks Hedge Funds Are Buying
10. Penguin Solutions Inc. (NASDAQ:PENG)
Forward P/E Ratio as of July 9: 11.71
Number of Hedge Fund Holders: 20
Penguin Solutions Inc. (NASDAQ:PENG) is one of the cheap IT stocks hedge funds are buying. On June 17, Penguin Solutions announced the second generation of its award-winning Stratus ztC Endurance platform, its flagship fault-tolerant computing platform designed to deliver seven nines (99.99999%) availability.
This new family of platforms ensures the uptime of critical applications and data while consolidating workloads within a highly reliable, manageable, and serviceable IT footprint for IT teams. The new generation expands its operating system support to include Linux (RHEL 9.4), in addition to bare metal or virtualized versions of Windows Server and VMware vSphere.
This combination of high-end performance and Linux support makes the platforms well-suited for industries such as financial services, retail, and manufacturing. Furthermore, the processing power of the Stratus ztC Endurance 9110 and 7110 platforms positions them well for AI inferencing workloads at the edge, delivering the high throughput and low latency required for applications like AI image classification.
Penguin Solutions Inc. (NASDAQ:PENG) designs and develops enterprise solutions worldwide.
9. Clarivate (NYSE:CLVT)
Forward P/E Ratio as of July 9: 6.94
Number of Hedge Fund Holders: 25
Clarivate (NYSE:CLVT) is one of the cheap IT stocks hedge funds are buying. On July 9, Clarivate released its annual 2025 G20 Research and Innovation Scorecard. This scorecard was developed by experts at the Institute for Scientific Information/ISI at Clarivate and provides a data-driven overview of the research and innovation capabilities of G20 member nations.
The 2025 scorecard now incorporates data from the Emerging Sources Citation Index/ESCI, which is a part of the Web of Science Core Collection, to provide a more comprehensive view of global research. The scorecard has been refined to better emphasize collaboration and impact, reflecting South Africa’s Ubuntu philosophy, the G20 host for 2025.
Dynamic visualizations are included to showcase each member’s research performance within its economic context and academic priorities. New additions also include OECD field-level breakdowns, insights into open access, and research aligned with Sustainable Development Goals (SDGs), highlighting how G20 nations are collaborating to address global challenges.
Clarivate (NYSE:CLVT) is an information services provider in the Americas, the Middle East, Africa, Europe, and the Asia Pacific.
8. Xerox Holdings Corporation (NASDAQ:XRX)
Forward P/E Ratio as of July 9: 6.63
Number of Hedge Fund Holders: 29
Xerox Holdings Corporation (NASDAQ:XRX) is one of the cheap IT stocks hedge funds are buying. On July 1, Xerox officially completed its acquisition of Lexmark International Inc. This transaction, valued at $1.5 billion including net debt and assumed liabilities, involved the purchase of Lexmark from Ninestar Corporation, PAG Asia Capital, and Shanghai Shouda Investment Centre.
The new structure accelerates innovation and scale by using the combined talent of both organizations. Xerox now ranks among the top 5 in every major print segment and is the market leader in managed print services.
Xerox expects the transaction to be accretive to its 2025 adjusted EPS and free cash flow, while also resulting in a lower level of pro forma gross debt leverage. The company also anticipates ~$240 million in transaction-related cost synergies, which are projected to contribute over $1 per share of additional adjusted EPS accretion by the end of the 2nd year following the transaction’s close.
Xerox Holdings Corporation (NASDAQ:XRX) is a workplace technology company that integrates hardware, services, and software for enterprises in North America, Latin America, Europe, the Middle East, Africa, India, and internationally.
7. Globant (NYSE:GLOB)
Forward P/E Ratio as of July 9: 15.2
Number of Hedge Fund Holders: 31
Globant (NYSE:GLOB) is one of the cheap IT stocks hedge funds are buying. On July 7, Globant announced a partnership with Suntory Global Spirits, which is a leader in premium spirits. The collaboration aims to build and deploy a gen AI-powered Commercial Insights Agent for Suntory Global Spirits. This AI Agent is designed to transform operations by compressing days of work into seconds and facilitating real-time decision-making.
The AI-powered Commercial Insights Agent can interpret complex business questions across dashboards, reports, and unstructured documentation. By automating insight retrieval, the agent is expected to reduce operating costs associated with traditional business intelligence workflows and decrease the time-to-action.
Additional benefits of the Commercial Insights Agent for Suntory Global Spirits include self-serve decision support at scale, which allows teams in different departments to independently access data insights, ask questions, or generate reports without dependencies on other teams. The agent is also trained on internal data to provide contextual GenAI recommendations.
Globant (NYSE:GLOB) provides technology services worldwide.
6. Concentrix Corporation (NASDAQ:CNXC)
Forward P/E Ratio as of July 9: 5.25
Number of Hedge Fund Holders: 33
Concentrix Corporation (NASDAQ:CNXC) is one of the cheap IT stocks hedge funds are buying. On June 30, Concentrix released its 2025 Sustainability Report, titled “The Power of One.” The report highlights the company’s progress towards its 2030 ESG (Environmental, Social, and Governance) goals across 5 strategic priorities: climate action, culture, innovation, community impact, and ethical business.
Concentrix views sustainability as a roadmap for creating tangible business value. In particular, Concentrix cut carbon emissions by 27% compared to its 2019 baseline, showing progress towards its 2030 goal of a 50% reduction.
Energy efficiency measures have reduced global energy consumption from 421 million kWh in 2019 to 379 million kWh in 2024, contributing to lower operating expenses and a more cost-efficient footprint. Concentrix also scaled its internal Carbon Challenge platform and engaged 12,000+ employees in reducing their carbon footprint and promoting personal and collective accountability in sustainability.
Concentrix Corporation (NASDAQ:CNXC) designs, builds, and runs integrated customer experience/CX solutions worldwide.
5. DXC Technology Company (NYSE:DXC)
Forward P/E Ratio as of July 9: 5.24
Number of Hedge Fund Holders: 33
DXC Technology Company (NYSE:DXC) is one of the cheap IT stocks hedge funds are buying. On July 3, DXC Technology announced the deployment of an AI-driven bid writing solution called Tendia for Ventia. Ventia is one of the largest essential infrastructure service providers in Australia and New Zealand.
The new platform significantly reduces the time required to draft initial bid responses for major infrastructure contracts, cutting it from days to minutes, thereby enhancing Ventia’s ability to quickly respond to complex and high-value tenders. The Tendia solution was developed in collaboration with DXC and was deployed in just 4 months.
It works by automating the time-consuming process of sourcing and synthesizing information from extensive document libraries. Tendia allows their teams to focus on higher-value work, deliver more accurate proposals, and respond more quickly to multi-million-dollar tenders.
DXC Technology Company (NYSE:DXC) provides IT services and solutions internationally.
4. Genpact Limited (NYSE:G)
Forward P/E Ratio as of July 9: 18.32
Number of Hedge Fund Holders: 34
Genpact Limited (NYSE:G) is one of the cheap IT stocks hedge funds are buying. On June 24, Genpact announced the full availability of the Genpact AP Suite. The agentic solution is designed to revolutionize accounts payable/AP processes and offer autonomous and goal-oriented tools that use advanced capabilities in document processing, predictive insights, and conversational AI.
The Genpact AP Suite is part of Genpact’s “Service-as-Agentic-Solutions” portfolio and is powered by Microsoft Azure’s AI stack. The Genpact AP Suite includes four product modules, which are AP Capture, AP Advance, AP Trace, and AP Assist.
The Genpact AP Suite is already delivering measurable results for clients. These benefits include more accurate autonomous data capture, greater touchless processing with productivity improvements, and reduced leakage with up to 90% early discount capture.
Genpact Limited (NYSE:G) provides business process outsourcing and IT services in India, the rest of Asia, North America & Latin America, and Europe.
3. Kyndryl Holdings Inc. (NYSE:KD)
Forward P/E Ratio as of July 9: 19.12
Number of Hedge Fund Holders: 39
Kyndryl Holdings Inc. (NYSE:KD) is one of the cheap IT stocks hedge funds are buying. On June 10, Kyndryl announced the launch of new advisory and implementation services. These services are designed to accelerate the modernization and migration of mainframe applications and data to Amazon Web Services/AWS by using the agentic AI capabilities of AWS Transform.
The initiative follows Kyndryl’s recent certification by AWS as an Elite Launch Partner for its new AWS Transform for Mainframe solution. Kyndryl’s new services simplify the integration or movement of mainframe applications to the AWS Cloud platform for enterprises by using the automated agentic AI capabilities of AWS Transform.
Kyndryl is also providing services to use AWS Transform for modernizing and migrating mainframe applications to AWS. For many organizations, conducting exploratory and deep analysis of source code and documentation can be time-consuming, and prone to errors. AWS Transform’s ability to translate complex code terms using agentic AI improves working with application documentation.
Kyndryl Holdings Inc. (NYSE:KD) is a technology services company and IT infrastructure services provider in the US, Japan, and internationally.
2. Science Applications International Corporation (NASDAQ:SAIC)
Forward P/E Ratio as of July 9: 12.41
Number of Hedge Fund Holders: 39
Science Applications International Corporation (NASDAQ:SAIC) is one of the cheap IT stocks hedge funds are buying. On June 25, Science Applications International was awarded a significant contract, called the Hyper-Innovative Operational Prototype Engineering/HOPE 2.0, which is valued at $928 million.
The contract supports the US Air Force Tactical Exploitation of National Capabilities/AF TENCAP and is set to begin this July, spanning a 5-year performance period. AF TENCAP operates as a congressionally mandated rapid-acquisition organization. Its primary function is to use existing air, space, cyber, national, and global Intelligence, Surveillance, and Reconnaissance/ISR systems.
The aim is to expedite the delivery of innovative and secure warfighting capabilities across Air Force and Joint military missions for the Department of Defense/DoD. Under this agreement, SAIC will provide Research, Development, Test, and Evaluation/RDT&E mission engineering services. These services are intended to assist AF TENCAP in developing prototypes that are near-ready for formal programs of record.
Science Applications International Corporation (NASDAQ:SAIC) provides technical, engineering, and enterprise IT services in the US.
1. Cognizant Technology Solutions Corporation (NASDAQ:CTSH)
Forward P/E Ratio as of July 9: 15.8
Number of Hedge Fund Holders: 49
Cognizant Technology Solutions Corporation (NASDAQ:CTSH) is one of the cheap IT stocks hedge funds are buying. On July 1, Cognizant was acknowledged as one of the initial organizations to sign the White House’s “Pledge to America’s Youth: Investing in Artificial Intelligence/AI Education.”
Cognizant joined a group of 60+ prominent US organizations that have committed to supporting America’s youth and investing in AI education through this pledge. Working in collaboration with the White House Task Force on AI Education, the organizations involved in this initiative aim to make AI education accessible to K-12 students throughout the US.
The commitments made by these 60+ companies involve providing resources for youth and teachers over the next 4 years. Through its global upskilling initiative, called Synapse, Cognizant aims to train 1 million individuals in advanced technologies such as AI by 2026.
Cognizant Technology Solutions Corporation (NASDAQ:CTSH) is a professional services company that provides consulting & technology, and outsourcing services internationally.
While we acknowledge the potential of CTSH to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CTSH and that has 100x upside potential, check out our report about this cheapest AI stock.
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