In this article, we will take a detailed look at oversold tech stocks to buy according to hedge funds.
Technology stocks have been among the best performing in the last 15 years. The technology sector has consistently outperformed the broad US market since the aftermath of the 2008 financial crisis, with particularly strong periods being the 2014-2021 and the 2023-2024. Technology stocks tend to perform well during economic expansions and periods of low interest rates, which stimulates the widespread adoption of technological advancements. During such periods, tech companies tend to trade at hyper-expensive valuations, which reflect the strong growth opportunities ahead. Many investors thus believe they become too overvalued, avoid having exposure to them, and consequently miss out on returns. The key point when it comes to technology stocks is that their valuations plummet instantly upon the slightest macroeconomic uncertainty and turmoil, which means that the best moment to acquire technology stocks is when they become oversold, and when fear dominates the market.
We believe that we are currently at an opportune time to increase exposure to technology, because it is the most beaten down sector year-to-date. Yardeni Charts show that the S&P Information Technology is currently trading at 24.4 forward P/E, much below the late 2024 peak around 30, marking an almost 20% decline in valuations (for comparison, the broad market’s valuation contracted by only 10%). Technology stocks haven’t been as cheap since 2023, when the Artificial Intelligence megatrend was just proliferating. Furthermore, the same source showed that the sector has experienced 2 consecutive quarters of negative revisions in earnings expectations, which means that Wall Street analysts have already priced in any short-term headwinds, reducing the chances of further negative surprises in the near future. In other words, the best possible scenario for buying is when both Wall Street and the market are pessimistic, which translates into weak expectations plus cheap valuations, and that’s exactly what appears to be happening with the technology sector right now.
READ ALSO: 11 Oversold Blue Chip Stocks to Buy According to Hedge Funds
To sum up, we concluded that prices for technology stocks are lower now. The only question that remains to be answered is whether the macroeconomic background will be favorable enough to facilitate a new bull run for the tech sector. First, as we already mentioned above, technology stocks thrive under a low interest-rate environment – recent comments by a Federal Reserve official hint towards higher odds that interest rates will be cut as early as June. As a result, yields of short to intermediate-maturity US government bonds fell significantly last week, in anticipation of lower rates. This raises the probability that technological tailwinds will unmute, and businesses will spend more on AI, cloud computing, cybersecurity, and other tech projects that require large cash outlays and are sensitive to financing costs. We are also pleased to find confirmation of our hypothesis from leading consultants such as Deloitte. Here’s an excerpt from their recent 2025 technology industry outlook report:
“Despite recent uncertainty and economic turbulence, the technology industry appears poised for growth in 2025, aided by increased IT spending, AI investments, and a renewed focus on innovation. Some analysts project that global IT spending will grow by 9.3% in 2025, with data center and software segments expected to grow at double-digit rates. Worldwide spending on AI is anticipated to grow at a compound annual growth rate of 29% from 2024 to 2028. Although the tech layoff trend persisted in 2024, reductions appeared to slow compared to 2023.”
With that being said, the current market setup appears extremely favorable for investing in oversold tech stocks that could recover some or all of the value lost during the recent Trump Tariff Turmoil. With tariff exceptions granted to electronic products, and President Trump hinting towards the possibility that China tariffs will come down from the current unsustainable 145%, the outlook for the technology sector is getting brighter.
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Our Methodology
To compile our list of oversold tech stocks, we used a screener to identify technology sector stocks that have a Relative Strength Index (RSI) below 40. We then compared the list with Insider Monkey’s proprietary database of hedge funds’ ownership and included in the article the top 11 stocks with the largest number of hedge funds owning the stock, ranked in ascending order.
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. VNET Group, Inc. (NASDAQ:VNET)
RSI: 34.97
Number of Hedge Fund Holders: 26
VNET Group, Inc. (NASDAQ:VNET) is a Chinese cloud services provider that offers managed hosting, cloud, and VPN services, allowing clients to connect to China’s internet backbone. The company operates over 50 data centers across more than 30 cities and has also developed AI supercomputing clusters to support artificial general intelligence applications.
VNET Group, Inc. (NASDAQ:VNET) delivered strong financial results in Q4 2024, with net revenue increasing by 18.3% YoY and adjusted EBITDA growing by 63.8%. For the full year 2024, the company achieved net revenues of RMB 8.26 billion (up 11.4% YoY) and adjusted EBITDA of RMB 2.43 billion (up 19.1% YoY), both exceeding their increased guidance, while also achieving a turnaround with a net profit of RMB 248 million compared to a net loss in 2023.
VNET Group, Inc. (NASDAQ:VNET)’s wholesale business showed remarkable growth, with wholesale capacity in service increasing by 127 megawatts QoQ to 486 megawatts, and wholesale capacity utilized reaching 353 megawatts. Looking ahead to 2025, management expects to deliver 400 to 450 megawatts in the next 12 months, representing a significant increase of 161% to 194% from 2024’s total deliveries, with projected net revenues expected to grow from 10% to 13% YoY. The double-digit revenue and EBITDA growth guidance is further supported by at least 26 hedge funds owning the stock, which makes VNET one of the best oversold stocks to buy according to hedge funds.
10. Sabre Corporation (NASDAQ:SABR)
RSI: 38.56
Number of Hedge Fund Holders: 31
Sabre Corporation (NASDAQ:SABR) is a travel technology company that, through its proprietary Sabre Global Distribution System, facilitates real-time booking and pricing for flights, hotels, and car rentals. The company also provides software for reservations, revenue management, and operations.
Sabre Corporation (NASDAQ:SABR) delivered strong financial results in 2024, with revenue growth of 4% and adjusted EBITDA increasing by 53% to $517 million, exceeding their initial guidance of $500 million. The company successfully completed its technology transformation objectives, migrating over 99% of compute capacity to the cloud and achieving more than $150 million in cost benefits compared to both 2019 and 2023. Its Hospitality Solutions segment reached record revenue levels and delivered $38 million in adjusted EBITDA, showing a $25 million improvement YoY. Despite sluggish performance year-to-date, the management’s successful initiatives reinforce our belief that SABR is one of the best oversold tech stocks to invest in.
Looking ahead to 2025, Sabre Corporation (NASDAQ:SABR) expects significant growth with double-digit increases in air distribution bookings, hotel distribution bookings, and Hospitality Solutions CRS transactions. The company provided guidance for 2025, projecting high single-digit year-on-year revenue growth, adjusted EBITDA of greater than $700 million, and free cash flow of greater than $200 million. This growth will be primarily driven by already signed commercial wins being implemented throughout the year, including significant new business from agencies in North America, Europe, and Asia. The company has also strengthened its balance sheet through refinancing activities, with the next large maturity not due until June 2027.
9. nCino, Inc. (NASDAQ:NCNO)
RSI: 37.19
Number of Hedge Fund Holders: 33
nCino, Inc. (NASDAQ:NCNO) is a financial technology company that provides a cloud-based operating system for banks and credit unions, aimed at improving efficiency, compliance, and customer experience. NCNO’s solutions cover loan origination, account opening, deposit operations, credit analysis, and portfolio management. NCNO ranked seventh on our recent list of 15 Best Small Cap AI Stocks to Buy Right Now.
nCino, Inc. (NASDAQ:NCNO) increased its revenues by 14% YoY in its latest quarter, primarily driven by subscription revenues, which increased by 16%. NCNO is transitioning from being a cloud banking leader to becoming a worldwide leader in AI banking, with a focus on leveraging data, analytics, and AI capabilities throughout its platform. Despite facing some short-term challenges, such as slower-than-expected product development in the Consumer Lending segment, management has taken decisive actions to address these issues, including completing platform integration of DocFox technology and making key leadership changes in European operations.
Looking ahead, nCino, Inc. (NASDAQ:NCNO) expects improved bookings growth later in the year, with subscription revenues expected to accelerate in fiscal 2027. The company is investing approximately $10 million in sales and marketing initiatives, including expanding its quota-carrying sales force for credit unions, emerging EMEA markets, and Japan. Management has implemented a more conservative guidance framework for fiscal 2026, projecting total revenues of $574.5-$578.5 million and subscription revenues of $503-$507 million, representing growth rates of 7% and 8%, respectively, at the midpoint. Despite a low RSI index of 37.19, the strong guidance for the future reinforces our conviction that NCNO is among the best oversold stocks to buy.
8. Flywire Corporation (NASDAQ:FLYW)
RSI: 39.36
Number of Hedge Fund Holders: 34
Flywire Corporation (NASDAQ:FLYW) is a global payments enablement and software company. It offers a proprietary payments platform and a global payment network, facilitating cross-border transactions in over 140 currencies across more than 240 countries. FLYW’s core clients are in sectors such as education, healthcare, travel, and B2B.
Flywire Corporation (NASDAQ:FLYW) achieved 24% revenue growth in 2024 and improved adjusted EBITDA margins by 540 basis points, despite facing significant headwinds from student visa policy changes. The company added over 800 new clients in 2024, surpassing 2023’s additions, bringing their total client base to approximately 4,500 globally. The travel vertical emerged as their second-largest revenue segment, showing particularly strong growth in EMEA and APAC regions. However, the company faced significant challenges in its education business, with double-digit declines in student visa issuance across their big 4 geographic markets, particularly severe impacts in Canada and Australia, where they expect revenue declines of approximately 30% in 2025.
In response to these challenges, Flywire Corporation (NASDAQ:FLYW) announced several strategic initiatives, including the acquisition of Sertifi to strengthen its travel vertical, which helps over 20,000 hotel locations globally automate key workflows. The company is also undertaking a comprehensive business portfolio review focusing on core strengths such as complex large value payment processing, global payment network, and verticalized software. Additionally, it announced a restructuring affecting approximately 10% of its workforce as part of its operational efficiency initiatives. Despite these challenges, management remains confident in its ability to adapt, projecting 10% to 14% FX-neutral growth for full year 2025, which makes FLYW one of the best oversold stocks on our list.
7. Enphase Energy, Inc. (NASDAQ:ENPH)
RSI: 36.86
Number of Hedge Fund Holders: 39
Enphase Energy, Inc. (NASDAQ:ENPH) is an energy technology company specializing in microinverter-based solar-plus-storage systems. Its core products are centered around solar energy management for residential and commercial customers. ENPH’s systems are compatible with most solar panels, which makes it one of the leaders in the market. The company also offers electric vehicle charging solutions through its ClipperCreek brand.
Enphase Energy, Inc. (NASDAQ:ENPH) reported a 35% YoY revenue growth in the recent Q1 2025. The company’s US revenue decreased 13% QoQ due to seasonality and softening demand, while European revenue increased 7%, driven by FlexPhase battery shipments in Germany. The company faced challenges from new tariffs, particularly on batteries sourced from China, which is expected to impact gross margins by 2% in Q2 2025 and 6-8% in Q3 2025, though they plan to fully offset this impact by Q2 2026 through supply chain diversification efforts.
Looking ahead, Enphase Energy, Inc. (NASDAQ:ENPH) is focusing on several growth initiatives, including the launch of its new-generation battery, which delivers the lowest installation cost of any ENPH product to date. ENPH is also expanding its served available market in Europe with the introduction of a new battery with backup, a new EV charger, and the upcoming IQ Balcony Solar Kit. Additionally, the company prepares to launch a new generation microinverter, which is expected to unlock a 10-gigawatt opportunity in commercial solar while driving cost per watt improvements across its residential business. With this move, management expects to significantly improve the payback period for clients and thus fuel demand for residential solar solutions. As the US administration hinted towards potentially negotiating lower tariffs with China, ENPH’s headwinds are likely to vanish, making the company one of the best oversold stocks to consider.
6. AppFolio, Inc. (NASDAQ:APPF)
RSI: 37.03
Number of Hedge Fund Holders: 40
AppFolio, Inc. (NASDAQ:APPF) provides cloud-based solutions for the real estate industry. Its primary products represent cloud tools for leasing, accounting, maintenance, and communication. The company integrates AI features to automate tasks and enhance operational efficiency for its clients. APPF’s advantage consists of large-scale and extensive partnerships with clients, serving over 19,000 property management entities and managing more than 8.3 million property units.
AppFolio, Inc. (NASDAQ:APPF) demonstrated strong financial performance in the latest reported Q1 2025, with revenue growing 16% YoY to $218 million, driven by increased customer value and ARPU growth. The company maintained healthy profitability with a non-GAAP operating margin of 24% and operating cash flow of 18%. The company’s customer base increased 6% in both customers and units compared to the previous year.
Strategic initiatives focused heavily on enhancing the resident experience, with key partnerships announced with Second Nature and Zillow joining the AppFolio Stack partner ecosystem. AppFolio, Inc. (NASDAQ:APPF)’s AI capabilities showed impressive results, with 89% of new customers utilizing AI-powered Realm-X capabilities, resulting in customers saving an average of 9.7 hours weekly and achieving a 73% higher lead-to-show conversion rate. Looking forward, management maintains its 2025 guidance for annual revenue between $920 million to $940 million, representing a 17% growth rate at the midpoint, while expecting to deliver non-GAAP operating margin between 24.5% and 26.5%. APPF’s guidance implies more than 20% EPS growth potential for the current year at least, making it one of the best oversold stocks to buy now.
5. Tyler Technologies, Inc. (NYSE:TYL)
RSI: 35.92
Number of Hedge Fund Holders: 44
Tyler Technologies, Inc. (NYSE:TYL) provides integrated software and technology services for the public sector. Its product portfolio includes solutions for courts and justice, public safety, property appraisal and tax, financial management, permitting and licensing, records management, and K-12 education. The company offers both on-premises and cloud-based deployments, with a strategic collaboration with Amazon Web Services for cloud hosting services.
Tyler Technologies, Inc. (NYSE:TYL) reported strong Q1 2025 results, exceeding expectations across key revenue and profitability metrics with double-digit total revenue growth driven by robust subscription revenues. SaaS revenues grew 21%, marking their 17th consecutive quarter of SaaS growth of 20% or more, while transaction-based revenues increased 18.5% due to higher transaction volumes and increased adoption of new services. The company’s non-GAAP operating margin expanded to 26.8%, benefiting from cloud operations efficiencies, a shift to higher-margin SaaS revenues, and favorable operating expense trends.
Despite unpredictable macro conditions, Tyler Technologies, Inc. (NYSE:TYL) maintains a positive outlook, emphasizing the stability of its business model and the resilience of the public sector market. At least 44 hedge funds showed conviction and owned TYL stock at the end of Q4 2024, making it one of the best oversold stocks to buy according to hedge funds.
The public sector market remains active with stable RFP and sales demonstration activity at elevated levels, though some procurement processes have slowed due to consultant-driven processes and additional macro environment scrutiny. The company’s leadership expressed confidence in its position, noting that local government revenues are primarily funded by reliable property taxes and utility revenues, while state-level transaction revenues are largely self-funded through user fees that are generally not impacted by economic conditions.
4. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC)
RSI: 38.03
Number of Hedge Fund Holders: 46
SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) offers a comprehensive suite of solutions for financial and healthcare institutions, including fund administration, investment accounting, risk and compliance analytics, and healthcare information processing. The company is notorious for its global scale, serving over 22,000 clients and managing over $45 trillion in assets on its platforms.
SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) reported strong Q1 2025 results with adjusted revenue of $1.514 billion, up 5.5%, and adjusted diluted earnings per share of $1.44, representing an 8.3% increase. The company achieved an adjusted consolidated EBITDA of $591.9 million, up 6.3%, with a margin of 39.1%, and demonstrated robust organic revenue growth of 5.1%. Notable performance came from the GlobeOp segment with 10.3% organic growth, driven by positive trends in private markets and retail alternatives, while the Wealth and Investment Technologies segment showed continued strength, and Global Investor and Distribution Services met its targets.
Looking ahead, SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is making significant strides in international expansion, particularly with the strategic Insignia Financial agreement in Australia and winning additional mandates in the region. The company is also advancing its AI capabilities, having launched a global governance-first AI platform and introduced 20 new AI agents capable of handling complex unstructured content. Despite operating in an environment of geopolitical and economic uncertainty, SSNC remains one of the best oversold stocks to consider as management stays confident in its business model and has raised its full-year 2025 guidance, expecting 4.4% organic revenue growth at the midpoint of its guidance.
3. Clearwater Analytics Holdings, Inc. (NYSE:CWAN)
RSI: 39.66
Number of Hedge Fund Holders: 48
Clearwater Analytics Holdings, Inc. (NYSE:CWAN) provides a cloud-based platform for automated investment accounting, performance measurement, compliance monitoring, and risk analytics. The company serves large financial and government institutions, managing more than $8 trillion in assets through its platform. The company also incorporated AI capabilities to improve client interactivity and data analysis. CWAN ranked seventh on our recent list of 10 Best Debt Free Mid Cap Stocks to Buy Now.
Clearwater Analytics Holdings, Inc. (NYSE:CWAN) delivered solid results in the most recently reported Q4 2024, with revenue growing 27.7% YoY, and record-high annual recurring revenue generated, showing a 25.3% increase on a YoY basis. The company also significantly improved its net revenue retention rate to 116%, and achieved a record-high gross margin, leading to a 33% EBITDA margin in the quarter. These impressive results were driven by successful cross-selling initiatives, strong client retention rates (at 98%), effective pricing strategies, as well as ongoing international expansion.
Looking ahead to 2025, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) expects revenue to grow between 19% to 20% YoY, with EBITDA projected to further expand at 34% for the fiscal 2025. The company continues to focus on multiple growth drivers, including new logo acquisition in North America, international expansion, back-to-base investments, and strategic partnerships, while maintaining its commitment to operational excellence and innovation. Despite negative year-to-date stock price performance, hedge funds have strong conviction in CWAN, making it one of the best oversold stocks on our list.
2. Global Payments Inc. (NYSE:GPN)
RSI: 33.12
Number of Hedge Fund Holders: 71
Global Payments Inc. (NYSE:GPN) is a US-based financial technology company that provides payment processing and software solutions to more than 4.6 million merchants, 1,500 financial institutions, and billions of consumers worldwide. In short, GPN technology securely connects businesses, banks, and customers to process payments made with cards, phones, or online systems.
Global Payments Inc. (NYSE:GPN) delivered strong financial performance in 2024, achieving 6% adjusted net revenue growth, record adjusted operating margins, and double-digit adjusted EPS growth, despite incremental FX headwinds. The company generated approximately $3 billion in adjusted free cash flow and returned $1.8 billion to shareholders, including proceeds from the recent divestiture of AdvancedMD. The company made significant progress in its transformation agenda, including consolidating technology teams under common leadership, centralizing operating functions, and unifying the Merchant Solutions business into a homogeneous worldwide organization.
Looking ahead to 2025, Global Payments Inc. (NYSE:GPN) expects constant currency adjusted net revenue growth of 5% to 6% over 2024, excluding dispositions, with annual adjusted operating margin expansion of approximately 50 basis points. The company has increased its operational transformation target to more than $600 million of annual run-rate operating income benefit by the first half of 2027, up from the initial outlook of more than $500 million. The company plans to return approximately $2 billion to shareholders during 2025 and will continue executing its transformation initiatives, including the global rollout of its Genius platform and further streamlining of operations. With ambitious plans and at least 71 hedge funds owning the stock, GPN secures its second place on our list of oversold stocks to invest in.
1. Fiserv, Inc. (NYSE:FI)
RSI: 30.69
Number of Hedge Fund Holders: 80
Fiserv, Inc. (NYSE:FI) provides payment solutions and technology like digital banking platforms, card issuing and processing, merchant acquiring, and point-of-sale systems, primarily for banking and fintech clients. The company’s key products include Clover, a point-of-sale platform for small businesses, and Carat, an omnichannel commerce solution for large enterprises.
Fiserv, Inc. (NYSE:FI) reported a strong start to 2025 with total company organic revenue growth of 7%, adjusted EPS up 14% YoY, and adjusted operating margin expanding by 200 basis points. The company maintained its full year 2025 guidance of 10-12% organic revenue growth and 15-17% adjusted EPS growth, despite anticipating slower growth in the first quarter. The quarter was marked by several strategic acquisitions, all aimed at expanding the company’s global footprint and capabilities.
Fiserv, Inc. (NYSE:FI) demonstrated strong momentum in key strategic initiatives, with Clover revenue growing 27% and expanding to 13 countries, while adding 33 new financial institutions as merchant partners in Q1. The merchant referral partnerships now include 40 of the top 100 financial institutions, with several large opportunities in the pipeline. The company also made progress in its embedded finance capabilities and launched new products, including the upcoming Clover Hospitality solution for upper-market restaurants. Management expressed confidence in the company’s positioning, noting that amid market disruption, clients are increasingly turning to Fiserv for its scale, stability, and technical prowess.
Overall FI ranks first on our list of oversold tech stocks to buy according to hedge funds. While we acknowledge the potential of FI to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than FI but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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