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.
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