In this article, we will look at the 10 Most Undervalued US Stocks According to Hedge Funds.
On May 13, Vivek Arya from Bank of America Securities appeared on a CNBC Television interview. He notes that the largest chip stocks are trading below market multiple despite market fears about a potential bubble. He noted that three of the largest companies under his coverage including Nvidia, Broadcom, and Micron are all trading at or below the market multiple. Arya highlighted that market is concerned about a bubble, however, he cannot recall a time in recent history when some of the biggest companies in the market were trading at cheap valuations. Arya attributed these cheaper valuations to the exponential growth potential of AI, which is presenting an optimistic earnings outlook for most companies in the technology sector.
That said, earlier on April 1, Venu Krishna, Managing Director & Head of U.S. Equity Strategy at Barclays, appeared on CNBC Television to discuss his firm’s view of the U.S. stock market during the US-Iran conflict. He noted that his firm is viewing the market from a situational standpoint, and the worst-case scenario implies a 5,900 target for the S&P 500. However, Barclays continues to expect that a resolution will be reached soon and hence has raised the price targets and earnings estimates on most US equities under the firm’s coverage. Krishna believes that the S&P 500 offers an attractive entry point for investors. Moreover, the price-to-earnings ratio of below 20 times can trigger dip buying opportunities, followed by strong earnings due to the booming technology sector.
With that, let’s take a look at the 10 Most Undervalued US Stocks According to Hedge Funds.
Our Methodology
To curate the list of 10 Most Undervalued US Stocks According to Hedge Funds, we used the Finviz Stock Screener, Seeking Alpha, and Insider Monkey’s hedge fund database. Using the screener, we aggregated a list of undervalued US stocks trading below the forward price-to-earnings ratio of 15 and ranked the stocks in ascending order of the number of hedge fund holders. We have limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment.
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).
10 Most Undervalued US Stocks According to Hedge Funds
10. ConocoPhillips (NYSE:COP)
Forward Price to Earnings Ratio: 12.94
Number of Hedge Fund Holders: 65
ConocoPhillips (NYSE:COP) is one of the Most Undervalued US Stocks According to Hedge Funds. On May 18, Reuters reported that ConocoPhillips (NYSE:COP) and Glenfarne’s Alaska LNG project have signed a 30-year natural gas supply agreement. This marks a significant milestone towards the project’s development.
The report highlighted that, as a result of this deal, Alaska LNG now has sufficient supply commitments to support a final investment decision for Phase One and address Alaska’s domestic energy needs. Reuters noted that Phase one of the project revolves around a 739-mile pipeline designed to deliver natural gas to Alaskan consumers. This is important as the state faces challenges of supply shortfall from declining Cook Inlet production. Later, Phase Two is expected to add LNG export facilities in Nikiski.
In addition to ConocoPhillips, Alaska LNG now has supply agreements with Exxon Mobil, Hilcorp Alaska, and Great Bear Pantheon.
In separate news, earlier on May 4, RBC Capital reiterated an Outperform rating on the stock with a price target of $152. The firm noted ConocoPhillips’ first-quarter 2026 earnings performance to be better than anticipated. RBC Capital highlighted that the impact of low production from Qatar was offset by higher commodity prices.
ConocoPhillips is an exploration and production company. Its Alaska segment focuses on exploring for, producing, transporting, and marketing crude oil, natural gas, and NGLs. The Lower 48 segment includes operations across the 48 contiguous U.S. states and the Gulf of Mexico.
9. Wells Fargo & Company (NYSE:WFC)
Forward Price to Earnings Ratio: 10.49
Number of Hedge Fund Holders: 72
Wells Fargo & Company (NYSE:WFC) is one of the Most Undervalued US Stocks According to Hedge Funds. On May 7, Wells Fargo & Company launched Advisor Gateway, which is a desktop platform that provides access to over 200 tools and applications for financial advisors.
Management noted that these tools include proprietary systems such as Account 360, Client Review Center, and third-party investment planning software and research tools. This platform launch is part of a broader $1 billion technology investment made by Wells Fargo’s Wealth & Investment Management division over recent years. Management highlighted that Advisor Gateway is available to advisors across all WIM channels, including those in the independent Wells Fargo Advisors Financial Network.
One of the key features of the platform is the Proposal and Portfolio Analytics tool, which is powered by BlackRock’s Aladdin Wealth technology. This feature enables real-time portfolio analysis and on-demand client proposals, helping advisors work more efficiently. Moreover, it also integrates Aladdin Wealth’s “Auto Commentary,” a generative AI feature that transforms complex risk data and client portfolio details into structured insights, helping advisors prepare more effectively for client meetings.
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.
8. Verizon Communications Inc. (NYSE:VZ)
Forward Price to Earnings Ratio: 9.35
Number of Hedge Fund Holders: 73
Verizon Communications Inc. (NYSE:VZ) is one of the Most Undervalued US Stocks According to Hedge Funds. On May 14, Reuters reported that Verizon Communications Inc. (NYSE:VZ), along with AT&T and T-Mobile, has agreed in principle to form a joint venture aimed at eliminating mobile dead zones across the United States, particularly in rural areas.
The report noted that this initiative is expected to use satellite-based “direct to device” technology to ensure broader connectivity and improved network reliability during natural disasters. Reuters also highlighted that the announcement follows the FCC’s approval of EchoStar’s $40 billion spectrum sale, with SpaceX acquiring 65 megahertz of spectrum for $17 billion to strengthen its Starlink direct-to-device service. Moreover, AT&T’s portion of the spectrum is expected to expand coverage in rural and underserved regions.
As per the report, some analysts view this joint venture as partly defensive, given concerns that SpaceX could eventually compete directly with traditional wireless providers.
Verizon Communications Inc. is a leading provider of technology, entertainment, and communications services worldwide.
7. AT&T Inc. (NYSE:T)
Forward Price to Earnings Ratio: 10.37
Number of Hedge Fund Holders: 77
AT&T Inc. (NYSE:T) is one of the Most Undervalued US Stocks According to Hedge Funds. On May 12, AT&T Inc. announced its partnership with Lexus to integrate the company’s 5G network connectivity into the Lexus vehicle lineup. This integration will make its debut on the redesigned 2026 Lexus ES.
Management noted that the Lexus Interface multimedia system will benefit from this integration by offering an improved home screen, faster responsiveness, enhanced Voice Assistant capabilities, and expanded entertainment options. Moreover, drivers would be able to access native full-screen navigation directly in the digital gauge cluster behind the steering wheel.
Notably, management noted that an AT&T Connected Car would allow passengers to connect up to five Wi-Fi-capable devices at 5G speeds, supporting streaming, browsing, and remote work on the go. AT&T has a longstanding history with automotive manufacturers and has had similar 5G connectivity for Toyota vehicles since October 2025. The company claims to cover more roads than any other carrier in the United States. The enhanced Lexus Interface will first appear on the 2026 Lexus ES before expanding to future Lexus models, laying the groundwork for next-generation connected vehicle services.
AT&T Inc. provides telecommunications and technology services and operates through the Communications and Latin America segments. Its Communications segment offers wireline telecom, wireless, and broadband services in the US and globally, while the Latin America segment manages services in Mexico.
6. Pfizer Inc. (NYSE:PFE)
Forward Price to Earnings Ratio: 8.56
Number of Hedge Fund Holders: 81
Pfizer Inc. (NYSE:PFE) is one of the Most Undervalued US Stocks According to Hedge Funds. On May 13, Pfizer Inc. (NYSE:PFE) announced receiving marketing authorization from the European Commission to expand the use of HYMPAVZI (marstacimab) for hemophilia A and B patients aged 12+ who have developed inhibitors.
Management noted that roughly 20% of hemophilia A patients and 3% of hemophilia B patients develop these inhibitors, which severely limit their treatment options. Moreover, recurring bleeding can cause joint damage and significantly disrupt daily life. In this situation, HYMPAVZI, which is a once-weekly subcutaneous treatment, provides a meaningful convenience advantage over existing treatments.
During the Phase 3 clinical trials, Pfizer Inc. noted that HYMPAVZI reduced treated bleeding rates by 93% compared to on-demand therapy. Moreover, long-term follow-up data of up to 53 months also showed sustained results. In addition to the European Commission, the FDA is reviewing an expanded application covering younger patients aged 6+. The decision is expected in Q2 2026. HYMPAVZI is already FDA-approved for patients 12+ without inhibitors.
Pfizer Inc. is a research-based global biopharmaceutical company focused on the discovery, development, manufacturing, marketing, sale, and distribution of biopharmaceutical products worldwide.
5. Citigroup Inc. (NYSE:C)
Forward Price to Earnings Ratio: 11.42
Number of Hedge Fund Holders: 115
Citigroup Inc. (NYSE:C) is one of the Most Undervalued US Stocks According to Hedge Funds. On March 18, Citigroup Inc. (NYSE:C) announced forming a 15 billion euros, roughly $17.48 billion private credit partnership with BlackRock’s HPS Investment Partners to support direct lending across Europe, the UK, and eventually the Middle East.
The report noted that, as per this partnership, Citigroup will source deal opportunities for borrowers in the region. The program aims to focus on sub-investment grade debt over an initial five-year term, which are riskier corporate loans that offer higher returns.
The deal is driven by growing demand from Citi’s corporate clients for customized private credit solutions. While Citi will source investment opportunities, HPS brings its lending expertise. Reuters noted that this partnership reflects a broader trend of banks teaming up with investment firms to capture a share of the booming, multi-trillion-dollar private credit market. Notably, earlier Citi struck a similar $25 billion deal with Apollo Global back in 2024.
Citigroup Inc. is a major global financial services holding company offering banking, credit, markets, wealth management, and advisory services to consumers, corporations, governments, and institutions. Headquartered in New York City, the company traces its roots back to 1812.
4. Salesforce, Inc. (NYSE:CRM)
Forward Price to Earnings Ratio: 13.16
Number of Hedge Fund Holders: 115
Salesforce, Inc. (NYSE:CRM) is one of the Most Undervalued US Stocks According to Hedge Funds. On May 18, Salesforce, Inc. (NYSE:CRM) was reiterated with an Underperform rating by analyst Tal Liani from Bank of America Securities. The analyst kept the price target of $160.
Tal Liani noted that while the Salesforce platform remains deeply entrenched with a strong enterprise foothold, he believes that the company is entering a structural reset as it navigates the shift toward AI-driven business models. The analyst highlighted this transition as a red flag due to three main issues.
Firstly, BofA noted that the company is adding fewer net new customers, suggesting slower growth. Secondly, the ability to upsell existing customers into higher-value products appears limited. Lastly, the analyst sees Salesforce’s AI monetization strategy as underwhelming.
That said, almost a month ago, on April 16, Truist Securities had reiterated a Buy rating on the stock with a price target of $280. The analyst noted that the discussion with customers and management indicated that LLM-based agentic coding tools are not expected to displace the Salesforce platform. The firm also noted that the overall flow of the company is seen as generally positive.
Overall, the Street has a positive opinion on CRM, with analysts’ 12-month average price target suggesting more than 39% upside from the current level.
Salesforce Inc. is a global enterprise software company that provides customer relationship management (CRM) and cloud-based business applications across sales, service, marketing, commerce, and data analytics. Its Customer 360 platform, powered by data tools and trusted AI, enables organizations to unify customer data and drive personalized engagement.
3. Bank of America Corporation (NYSE:BAC)
Forward Price to Earnings Ratio: 11.14
Number of Hedge Fund Holders: 118
Bank of America Corporation (NYSE:BAC) is one of the Most Undervalued US Stocks According to Hedge Funds. On May 8, Reuters reported that Bank of America Corporation (NYSE:BAC) has hired Richard Hardegree as Vice Chair of Mergers and Acquisitions.
Hardegree is a seasoned investment banker at UBS and brings over 30 years of M&A experience with a strong focus on the semiconductor sector. He is expected to join in August, will be based in Palo Alto, and report to BofA’s co-heads of global M&A.
The report noted that Hardegree’s track record shows that he has been advising on major tech deals such as Broadcom’s acquisition of VMware and SAP’s sale of Qualtrics to Silver Lake. Moreover, this new hiring reflects the bank’s broader strategy to expand its tech dealmaking footprint. The report noted that BofA had already poached four other veteran bankers from competitors earlier this year, signaling an aggressive strategy to gain market share.
This move comes at a time when global M&A activity has surged more than 32% year-over-year, with roughly $2 trillion in deals announced so far in 2026.
Bank of America Corporation is a leading global financial institution offering banking, lending, investing, wealth management, and corporate finance services to consumers and businesses. Headquartered in Charlotte, North Carolina, the company was founded in 1904 as the Bank of Italy in San Francisco by A. P. Giannini.
2. JPMorgan Chase & Co. (NYSE:JPM)
Forward Price to Earnings Ratio: 13.34
Number of Hedge Fund Holders: 131
JPMorgan Chase & Co. (NYSE:JPM) is one of the Most Undervalued US Stocks According to Hedge Funds. On May 13, Reuters reported that JPMorgan Chase & Co. has reorganized its investment banking division by appointing three new co-heads.
The co-heads include Dorothee Blessing, chief of investment banking coverage, Kevin Foley, global head of capital markets, and Jared Kaye, global co-head of financial institutions group. Moreover, the veteran banker Anu Aiyengar moves into a senior advisory role as global chair of investment banking and M&A, while Charles Bouckaert takes over as global head of M&A.
The report also noted that JPM has restructured how it organizes industry coverage by creating unified global heads for each sector. This replaces the previous split between coverage and M&A roles. This reorganization comes at a crucial time when global dealmaking is surging. Despite all the volatility, the M&A announcement has hit $2 trillion this month, reflecting a 33% year-over-year growth. According to Reuters, this is driven by favorable US regulatory policies, AI capital expenditure, and a strong IPO market.
JPMorgan Chase & Co. is a financial holding company involved in investment banking, consumer and small-business financial services, commercial banking, transaction processing, and asset management.
1. Micron Technology, Inc. (NASDAQ:MU)
Forward Price to Earnings Ratio: 12.43
Number of Hedge Fund Holders: 137
Micron Technology, Inc. (NASDAQ:MU) is one of the Most Undervalued US Stocks According to Hedge Funds. On May 18, Melius Research raised the firm’s price target on Micron Technology, Inc. (NASDAQ:MU) from $700 to $1,100 and maintained a Buy rating.
The firm noted that they remain optimistic regarding their long-term conviction in memory chips and AI semiconductors, despite the fact that Trump’s recent visit to China produced no concrete developments for the sector. Melius has upgraded the estimates across all buy-rated “bottleneck stocks,” including Micron, Sandisk, AMD, Intel, and Marvell.
However, the firm maintained a Hold rating for Qualcomm but updated the price target. The firm believes semiconductor companies will increasingly capture market capitalization and upside that currently resides in traditional software companies and non-semiconductor Magnificent 7 names over the long run.
Micron Technology Inc. provides memory and storage solutions sold into client, cloud server, enterprise, graphics, networking, smartphone, mobile-device, automotive, industrial, and consumer markets, among others.
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