In this piece, we discuss the 11 Most Undervalued AI Stocks to Buy Now.
As of February 25, 2026, U.S. software stocks have declined 20% over the past month, according to Reuters. The fears surrounding AI continue to weigh on investor sentiment across the broader technology sector, particularly the software group.
Earlier, Citrini Research’s February 23 report titled “The 2028 Global Intelligence Crisis” shed light on what to expect from the AI boom. The report discussed the possibility of a downturn, including skyrocketing unemployment, if AI actually replaces white-collar jobs.
However, Jim Cramer thinks otherwise. At the start of this week, the expert argued that the report presents a worst-case scenario and that he personally believes investors are buying the speculative, hypothetical narrative.
He commented, “I can’t help but grow more pessimistic when I see how easily a piece of science fiction can crush the market as if it’s science fact.”
Meanwhile, Matt Shumer, CEO and co-founder of AI firm Otherside AI, also presented a report on February 9 with a similar theme.
Reuters reports that the sector-wide selloff has tempered the valuation of technology stocks, with the sector’s valuation relative to the broader sector at its worst level in six years. The sector’s forward price-to-earnings multiple now sits at the same level as defensive consumer staples, as evidenced by Walmart’s valuation, which is now higher than major tech giants like Apple, Alphabet, Amazon, Microsoft, and Nvidia.
Amid a fear-based valuation reset, a case builds around the most undervalued AI stocks, which we will now discuss.
Methodology
To curate our list of the 11 most undervalued AI stocks to buy now, we used an online screener to identify AI stocks trading below a forward price-to-earnings multiple of 17x. We defined AI stocks as companies considered either pure-play AI firms or beneficiaries of AI technology. Next, we assessed analyst and hedge fund sentiment surrounding these stocks. To find hedge fund sentiment, we used Insider Monkey’s hedge fund database, which tracks over 1,000 hedge funds as of Q4 2025.
Moreover, we narrowed down our list to only those stocks that have recently reported significant developments likely to impact investor sentiment. Finally, we ranked our list of the most undervalued AI stocks to buy now in ascending order based on the number of hedge funds bullish on each stock.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Note: All data were extracted as of market close on February 25, 2026.
11. Leidos Holdings, Inc. (NYSE:LDOS)
With significant analyst and hedge fund sentiment, alongside a low forward price-to-earnings (PE) ratio, Leidos Holdings, Inc. (NYSE:LDOS) secures a spot on our list of the most undervalued AI stocks to buy now.
On February 19, 2026, Leidos Holdings, Inc. (NYSE:LDOS) demonstrated its strong operational progress, announcing that its Terminal Flight Data Manager system had started running at Reagan National Airport. Marking a 45% faster rollout than the typical 18-month cycle, the system takes the place of paper flight strips, featuring real-time digital tracking and predictive tools.
The move reflects the company’s focus on mission-critical programs, with the system primarily serving the Federal Aviation Administration. The system is currently live in ten airports, with more planned for the future. Looking ahead, Leidos Holdings, Inc. (NYSE:LDOS) remains well-positioned to capitalize on government plans to modernize U.S. airspace infrastructure.
Amid this positive development, analysts at Stifel remain skeptical about Veterans Affairs contract risks and concerns surrounding AI’s impact on the stock, prompting a price target cut from $220 to $205. While noting the company’s strong fourth-quarter EBITDA, the firm sees limited short-term visibility and describes management’s FY26 guidance as conservative. As of February 18, 2026, the firm keeps a ‘Hold’ rating on Leidos Holdings, Inc. (NYSE:LDOS).
Leidos Holdings, Inc. (NYSE:LDOS) focuses on delivering defense, civil, and health technology solutions. The company specializes in providing digital modernization, mission systems, infrastructure security, and federal health services, primarily serving U.S. government agencies.
10. ICON Public Limited Company (NASDAQ:ICLR)
With significant analyst and hedge fund sentiment, alongside a low forward price-to-earnings (PE) ratio, ICON Public Limited Company (NASDAQ:ICLR) secures a spot on our list of the most undervalued AI stocks to buy now.
Amid an internal accounting investigation, the stock has slid nearly 50% and 45% on a one-year and year-to-date basis, respectively. Analysts at Jefferies revisited the stock on February 23, 2026, and noted that the stock had fallen enough, making its current valuation attractive. Although the firm reduced the target on the stock from $175 to $135, it remains positive on the company’s outlook despite the concerns surrounding AI’s impact on the R&D industry. While acknowledging the potential pressure that AI will put on labor-intensive companies, such as ICON Public Limited Company (NASDAQ:ICLR), the firm says AI will not disrupt the industry to the extent the market is predicting. Jefferies upgraded the stock from ‘Hold’ to ‘Buy’.
Meanwhile, while discussing the share price decline tied to the company’s investigation into accounting practices, analysts at TD Cowen calmed investors down by noting that the investigation’s impact on the company’s revenue is exaggerated. Cutting 2026 and beyond revenue estimates by just 2%, the firm projects a 14% impact on ICON Public Limited Company (NASDAQ:ICLR)’s adjusted earnings per share in 2026 and 2027.
ICON Public Limited Company (NASDAQ:ICLR) is a clinical research company that provides outsourced development services to the pharmaceutical, biotechnology, and medical device industries.
9. EPAM Systems, Inc. (NYSE:EPAM)
EPAM Systems, Inc. (NYSE:EPAM) is one of the most undervalued AI stocks to buy now.
View from Truist analysts remains mixed on EPAM Systems, Inc. (NYSE:EPAM), despite its strong fourth-quarter results, in which both revenue and operating income surpassed analyst expectations.
On the positive side, Truist remains confident in the company’s revenue momentum, which it believes should help EPAM Systems, Inc. (NYSE:EPAM) achieve its $600 million revenue target for 2026.
However, the firm remains cautious as it currently believes EPAM Systems, Inc. (NYSE:EPAM) is in a transitional phase and has yet to accelerate its AI engagement sufficiently to earn a more constructive outlook.
Accordingly, on February 20, 2026, the investment bank reduced its price target on EPAM Systems, Inc. (NYSE:EPAM) from $220 to $146 and reiterated a ‘Hold’ rating.
The company’s fourth-quarter and full-year results were released just a day earlier, where EPAM Systems, Inc. (NYSE:EPAM) posted revenue of $1.41 billion, a 12.80% year-over-year increase. For the quarter, diluted non-GAAP EPS came out at $3.26 per share, marking a 14.80% YoY growth. The company holds $1.30 billion in cash and cash equivalents as of December 31, 2025. For full-year 2026, management projects year-over-year revenue growth between 4.5%-7.5%. The quarterly performance was led by the company’s accelerating AI-native revenue, driven by steady execution and continued investment in AI innovation, according to Fejes, CEO and President of EPAM. He stated:
“By continuing to invest in AI innovation, talent development and strategic partnerships, we are driving our own transformation, building on top of our core engineering DNA and strengthening our strategic positioning to win in the AI-native build era.”
EPAM Systems, Inc. (NYSE:EPAM) provides digital engineering, cloud, and AI-enabled transformation services by combining software engineering with customer experience design, business advisory, strategy, and technology innovation services. The company’s focus remains on areas such as cloud platforms, cybersecurity, and AI.
8. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)
With significant analyst and hedge fund sentiment, alongside a low forward price-to-earnings (PE) ratio, SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) secures a spot on our list of the most undervalued AI stocks to buy now.
As of February 25, 2026, SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) retains the confidence of over 80% of covering analysts that remain bullish on it. The consensus price target of $101.50 reflects an upside potential of 39.29%.
Sentiment remains positive as SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) reinforces its commitment to delivering shareholder returns.
In a press release dated February 19, 2026, SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) announced that its Board declared a quarterly dividend payment of $0.27 per share, which is payable on March 16, 2026. The payment will be made to shareholders of record as of the close of business on March 2, 2026.
While analyst concerns about AI risks persist, SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)’s consistent mid-single-digit growth has earned the confidence of Morgan Stanley analysts. The growth calmed analyst concerns that the company’s organic growth may soften. However, Morgan Stanley’s analysts argue that the AI risk narrative continues to weigh on the stock. Accordingly, the firm reduced its price target from $92 to $86. Morgan Stanley keeps an ‘Equal Weight’ rating on SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) as of February 9, 2026.
SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) delivers software solutions to the financial and healthcare industries, offering products such as Advent Genesis, Antares, Asset Allocators, AWD, Axys, BANC Mall, BRIX, DST Vision, Evare, Lightning, and Moxy.
7. HP Inc. (NYSE:HPQ)
With significant analyst and hedge fund sentiment, alongside a low forward price-to-earnings (PE) ratio, HP Inc. (NYSE:HPQ) secures a spot on our list of the most undervalued AI stocks to buy now.
On February 25, 2026, JPMorgan cut the target to $19 from $21, while reiterating a ‘Neutral’ rating. The firm updated its model following the fiscal Q1 earnings release, incorporating the challenging earnings outlook.
The firm had reduced the target from $25 earlier on February 19, 2026, when analysts at JPMorgan dismissed the case for upside, citing weak sentiment. The bank’s analysts warned that HP Inc.’s (NYSE:HPQ) short-term results could be strong due to pull-forward demand, but they will not be indicative of underlying demand.
Meanwhile, as of February 26, 2026, HP Inc. (NYSE:HPQ) traded at $18.81, over 44% below its 52-week high of $34.07. The company’s shares are under pressure as broader industry challenges weigh on PC makers’ outlook.
Amid tempered investor sentiment, analysts elsewhere appear not too excited about HP Inc. (NYSE:HPQ) either.
Citi cited headwinds related to end-demand for PCs on February 17, 2026, and issued a mixed outlook for HP Inc. (NYSE:HPQ). The firm retained its ‘Neutral’ rating and reduced the target from $22 to $20.
HP Inc. (NYSE:HPQ) provides personal computers, printers, supplies, and related solutions, serving both commercial and consumer customers.
6. DocuSign, Inc. (NASDAQ:DOCU)
DocuSign, Inc. (NASDAQ:DOCU) is one of the most undervalued AI stocks to buy now.
As of February 26, 2026, software stocks remain downbeat. The pressure weighs on DocuSign, Inc. (NASDAQ:DOCU)’s share price, sending it down over 33% YTD and nearly 50% over the past year.
Following a difficult 12-month period, DocuSign, Inc. (NASDAQ:DOCU) hit a new 52-week low of $43.63 on February 13, 2026, and closed at $41.75 on February 23, 2026.
Ahead of fourth-quarter earnings, analysts remain concerned about how software names, such as DocuSign, Inc. (NASDAQ:DOCU), can mitigate AI-related disruptions. Lingering uncertainty drove Jefferies’ downgrade of the stock to ‘Hold’ on February 23, 2026, with the firm saying application software players have suffered the most. As for DocuSign, Inc. (NASDAQ:DOCU), analysts at Jefferies see bleak chances of the company’s recovery to double-digit growth in the near future.
Jefferies sharply cut DocuSign, Inc. (NASDAQ:DOCU)’s price target from $105 to $45.
Meanwhile, last week, BTIG reduced its price target on DocuSign, Inc. (NASDAQ:DOCU) from $88 to $70, as of February 18, 2026, while keeping its ‘Buy’ rating.
DocuSign, Inc. (NASDAQ:DOCU) provides cloud-based e-signature and agreement automation solutions. With its business model, the company enables secure document signing, identity authentication, workflow automation, and digital transaction management for businesses and individual consumers.
5. Pinterest, Inc. (NYSE:PINS)
Pinterest, Inc. (NYSE:PINS) is one of the most undervalued AI stocks to buy now.
On February 18, 2026, Pinterest, Inc. (NYSE:PINS) reported a bullish outlook for the first quarter, after incorporating the impact from its December 2025 acquisition of tvScientific. The move’s significance is that it will help the company expand its connected-TV capabilities within its Performance+ AI optimization portfolio.
Incorporating synergies from the move, Pinterest, Inc. (NYSE:PINS) now projects revenue of $958-$978 million, up from its prior range of $951-$971 million. However, the revenue guidance upgrade was accompanied by a reduction in EBITDA guidance, driven by acquisition costs and cash outlay. The company now forecasts $163-$183 million, down from an earlier range of $166-$186 million. Meanwhile, the midpoint revenue guidance exceeds the analyst consensus of $964.9 million.
Previously, on February 13, 2026, Pinterest, Inc. (NYSE:PINS) saw a share price decline wipe off $2 billion of its $12.52 billion market value. The 21% share price decline took the shares to the low they reached during the pandemic.
The plunge reflects the weak sentiment surrounding tariff-driven pullbacks in major U.S. retailers’ spending and intensifying AI competition.
With its visual discovery platform, Pinterest, Inc. (NYSE:PINS) allows users to design and shop image-based content. The company’s monetization strategy is tied to performance-driven digital advertising solutions enhanced by AI tools.
4. Dell Technologies Inc. (NYSE:DELL)
With significant analyst and hedge fund sentiment, alongside a low forward price-to-earnings (PE) ratio, Dell Technologies Inc. (NYSE:DELL) secures a spot on our list of the most undervalued AI stocks to buy now.
With memory costs rising to record highs, analysts remain mixed on Dell Technologies Inc. (NYSE:DELL). Yet BofA remains confident that the company’s supply chain discipline and structural cost controls may help it sail more smoothly than its competitors.
Shedding light on the upcoming fourth-quarter earnings release on February 26, 2026, analysts at BofA expect the quarter to reflect a strong performance apart from rising costs. After incorporating the uncertainty tied to the future trajectory of costs, the firm adjusted its target, revising it downward from $150 to $135. In the stock’s valuation model, the firm reduced its FY27 EPS estimate by $0.86 to $10.00.
As of February 23, 2026, BofA keeps a ‘Buy’ rating on Dell Technologies Inc. (NYSE:DELL). The firm remains constructive on the stock as the company tackles memory headwinds.
In response, Dell Technologies Inc. (NYSE:DELL) is engaging China’s ChangXin Memory Technologies to test and approve DRAM chips, as reported by Nikkei Asia on February 4, 2026. Amid a global shortage, market observers are projecting memory prices to remain at elevated levels this year. At a time like this, Dell Technologies Inc. (NYSE:DELL)’s move to diversify its suppliers becomes critical amid its push to ease near-term margin pressure.
Dell Technologies Inc. (NYSE:DELL) focuses on delivering end-to-end IT infrastructure, alongside client computing solutions. The company serves both enterprise and consumer markets worldwide.
3. IQVIA Holdings Inc. (NYSE:IQV)
With significant analyst and hedge fund sentiment, alongside a low forward price-to-earnings (PE) ratio, IQVIA Holdings Inc. (NYSE:IQV) secures a spot on our list of the most undervalued AI stocks to buy now.
Following the company’s fourth-quarter earnings release, analysts at Mizuho and Truist revise their valuation models on IQVIA Holdings Inc. (NYSE:IQV).
Incorporating the company’s Q4 performance, Mizuho lowered its price target on the stock from $266 to $215 on February 23, 2026. The firm reiterated its ‘Outperform’ rating on IQVIA Holdings Inc. (NYSE:IQV).
Meanwhile, concerns surrounding the potential impact of AI continue to weigh on analyst sentiment at Truist. Alongside the quarterly performance, the company’s re-segmentation prompted the investment bank’s analysts to cut their forward EBITDA multiple from 14x to 13x to incorporate AI headwinds. While maintaining its ‘Buy’ rating, the firm reduced its price target on the stock from $290 to $245 on February 19.
For the fourth quarter, IQVIA Holdings Inc. (NYSE:IQV) reported a top-line growth of 10.30%, taking its revenue to $4.36 billion. As of quarter-end, the company’s R&D backlog climbed to $32.70 billion, while the book-to-bill ratio reached 1.18x.
On an adjusted basis, EPS for the quarter came out at $3.42, a 9.60% increase. Looking ahead, IQVIA Holdings Inc. (NYSE:IQV) expects revenue of $17.15-$17.35 billion and adjusted EPS of $12.55-$12.85. The company announced its quarterly results on February 5, 2026.
IQVIA Holdings Inc. (NYSE:IQV) engages in the provision of clinical research services, commercial analytics, and healthcare intelligence solutions. Leveraging data, technology, and AI, the company helps life sciences companies with drug development, commercialization, and real-world evidence generation worldwide.
2. QUALCOMM Incorporated (NASDAQ:QCOM)
QUALCOMM Incorporated (NASDAQ:QCOM) is one of the most undervalued AI stocks to buy now.
Analysts at Wells Fargo believe QUALCOMM Incorporated (NASDAQ:QCOM) may lift broader sentiment once more clarity emerges surrounding the company’s AI and data center strategy. The AI inference market opportunity exceeds $ 100 billion, which the firm’s analysts believe is not currently reflected in the company’s share price. Analysts expect QUALCOMM Incorporated (NASDAQ:QCOM) to capitalize on the attractive opportunity, projecting $5-$7 billion in annual revenue in 2027.
With this outlook, Wells Fargo raised QUALCOMM Incorporated (NASDAQ:QCOM)’s price target from $135 to $150 on February 24, 2026, while upgrading the stock from ‘Underweight’ to ‘Equal Weight’.
Meanwhile, on February 18, 2026, QUALCOMM Incorporated (NASDAQ:QCOM) shared its plans to extend its long-standing commitment to advancing India’s technology landscape. With an investment of up to $150 million, the company aims to accelerate the country’s rapidly expanding technology and AI startup ecosystem.
Specifically, QUALCOMM Incorporated (NASDAQ:QCOM) will work toward accelerating AI in areas such as automotive, IoT, robotics, and mobile.
By developing wireless technologies and semiconductors, QUALCOMM Incorporated (NASDAQ:QCOM) serves the mobile and connected devices segment.
1. Adobe Inc. (NASDAQ:ADBE)
Adobe Inc. (NASDAQ:ADBE) is one of the most undervalued AI stocks to buy now.
Investors are currently skeptical of Adobe Inc. (NASDAQ:ADBE) amid heightened competition from AI-powered tools. AI coding systems directly hamper the company’s core creative franchise, as they enable the easy building of competing solutions, eliminating the need for costly software packages.
Therefore, only 55% of analysts who cover the stock are bullish on Adobe Inc. (NASDAQ:ADBE) as of February 25, 2026. This is a significant decline from a year ago, when roughly 72% of the covering analysts were bullish on it. Yet the consensus price target currently reflects upside potential of approximately 60%.
At the same time, Adobe Inc. (NASDAQ:ADBE) faces share price pressure as sentiment continues to weaken amid AI disruption. Having experienced a share price decline of roughly 25% and over 40% on a YTD and one-year basis, the stock reached its 52-week low on February 24, 2026.
AI remains a threat to software stocks, prompting Polar Capital to sell almost all of the firm’s stake in Adobe Inc. (NASDAQ:ADBE) and other software companies such as SAP SE, ServiceNow, and HubSpot. On February 16, 2026, one of the firm’s analysts, Nick Evans, said, “We think application software faces an existential threat from AI.”
Adobe Inc. (NASDAQ:ADBE), a global technology company, delivers digital marketing and media solutions. The company enables individual consumers and businesses to create, publish, and promote content, as well as utilize its eLearning, technical document publishing, web conferencing, document and forms platforms, web app development, high-end printing, and Adobe Advertising solutions.
While we acknowledge the potential of ADBE 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 ADBE and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 12 Best Beaten Down Technology Stocks to Buy According to Wall Street Analysts and 7 Most Volatile Stocks Under $5 for Day Trading.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email below.
