In this article, we will look at the 11 Most Undervalued Growth Stocks to Buy According to Hedge Funds.

​On September 25, Stephen Parker, JPMorgan Private Bank’s co-head of global investment strategy, joined CNBC for an interview to discuss the driving factors of the market. He noted that the investors need to understand that, despite the valuations, the market is of higher quality as compared to the past. This market has stronger growth momentum and is also less cyclical, which justifies its higher valuation compared to historical averages.

​Parker believes that over the next 6 to 12 months, earnings are expected to be the key driver for the market. He noted that he does not expect valuation multiples to expand further and even expects a slight contraction. However, he expects strong earnings growth, forecasting a third consecutive year of double-digit earnings growth for the S&P 500. Parker noted that this earnings momentum is expected to keep markets moving higher.

​While talking about the risks, he noted that tariffs and their impact on the profit margins pose some risk to the market. However, the companies have so far been able to absorb tariff impact, and the profit margins have remained robust. Looking forward to 2026, Parker highlighted positive tailwinds, including easier financial conditions due to the Federal Reserve’s actions.

​With that, let’s take a look at the 11 most undervalued growth stocks to buy according to hedge funds.

​Our Methodology

To curate the list of most undervalued growth stocks to buy according to hedge funds. We used the Finviz Stock Screener, Seeking Alpha, and Insider Monkey’s Q2 2025 database. Using the screener, we aggregated a list of undervalued growth stocks trading below the forward P/E of 15. Next, we checked the P/E ratios from Seeking Alpha and ranked the stocks in ascending order of the number of hedge fund holders sourced from Insider Monkey’s database.

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).

​11 Most Undervalued Growth Stocks to Buy According to Hedge Funds

​11. Novartis AG (NYSE:NVS)

Forward P/E Ratio: 13.72

Number of Hedge Fund Holders: 34

​Novartis AG (NYSE:NVS) is one of the Most Undervalued Growth Stocks to Buy According to Hedge Funds. On September 24, ​Novartis AG (NYSE:NVS) announced that new data on Kesimpta for relapsing multiple sclerosis will be presented at ECTRIMS 2025 in Barcelona from September 24 to September 26.

This data comes from two studies. Firstly, the ARTIOS study evaluated patients who switched to Kesimpta after their disease worsened on oral therapies like fingolimod or fumarate. The results showed a major drop in disease activity with the annualized relapse rate falling to 0.06 over 96 weeks. Moreover, MRI scans showed near-complete suppression of lesions, with over 90% patients having no evidence of disease activity, called NEDA-3.

​Secondly, the ALITHIOS study looked at newly diagnosed, treatment-naive patients on first-line continuous Kesimpta for up to seven years. The results show that more than 90% achieved NEDA-3 in seven years. The long-term benefits included sustained low relapse rates, strong MRI lesion control, and a favorable safety profile with no new concerns.

Novartis AG (NYSE:NVS) is a Swiss multinational pharmaceutical company. It develops, manufactures, and markets branded and generic prescription drugs, biosimilars, and active pharmaceutical ingredients.

10. Cognizant Technology Solutions Corporation (NASDAQ:CTSH)

Forward P/E Ratio: 13.2

Number of Hedge Fund Holders: 47

​Cognizant Technology Solutions Corporation (NASDAQ:CTSH) is one of the Most Undervalued Growth Stocks to Buy According to Hedge Funds. On September 17, Cognizant Technology Solutions Corporation (NASDAQ:CTSH) and Venbrook Group announced a new strategic partnership to improve the insurance claims process for property and casualty carriers.

​Management noted that the collaboration focuses on creating a more efficient and cost-effective claims lifecycle environment. Venbrook is a fast-growing P&C claims third-party administrator with a nationwide network of licensed adjusters, whereas Cognizant Technology Solutions Corporation (NASDAQ:CTSH) brings advanced AI technology to the table.

Together, the companies are developing an innovative, AI-powered TPA claims solution. This solution uses agentic AI to handle complex tasks and orchestrate workflows. Moreover, it also uses generative AI to assist with customer communications and compliance. The goal is to digitize key parts of the claims process to meet growing market demands. The TPA market is projected to reach $795 billion by 2032, thereby highlighting the significance of this collaboration.

​Cognizant Technology Solutions Corporation (NASDAQ:CTSH) is a global company that helps businesses modernize through technology and consulting services.