In this article, we will discuss the 11 Underperforming Tech Stocks to Buy According to Analysts.
On June 23, Andrew Slimmon, Morgan Stanley Investment Management Senior Portfolio Manager, joined CNBC’s ‘Squawk Box’ to discuss the latest market trends and ongoing tech selloff, specifically addressing the recent sell-off in AI-related stocks. He characterized this market movement as healthy, explaining that while these stocks are not necessarily expensive, they have become crowded due to momentum traders, and a correction helps prevent the type of unsustainable euphoria that typically leads to poor outcomes. He noted that the shift in Fed expectations (moving from certainty regarding interest rate cuts to the possibility of hikes) has also contributed to deflating this bubble.
Despite the current volatility, Slimmon maintained that pullbacks in these AI stocks represent buying opportunities. He argued that the stocks are backed by valid earnings revision stories, as both share prices and earnings have increased significantly. He pointed out that sectors like memory and chip stocks are not currently trading at high multiples, suggesting the market is acting rationally and correctly pricing these cyclical earnings rather than succumbing to irrational euphoria. He reiterated that while there are investors driven solely by the momentum of rising prices, the fundamental earnings growth justifies holding these positions.
Our Methodology
We used screeners to identify tech and tech-enabled stocks that have declined by at least 30% over the past 3 months but for which analysts see potential to recover (with an average upside potential of at least 30%). We then limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
Note: All data was sourced on June 25.
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. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
11 Underperforming Tech Stocks to Buy According to Analysts
11. Verra Mobility Corporation (NASDAQ:VRRM)
Number of Hedge Fund Holders: 31
Verra Mobility Corporation (NASDAQ:VRRM) is one of the underperforming tech stocks to buy according to analysts. On June 15, Verra Mobility was selected by the Los Angeles City Council to design, operate, and maintain the state’s largest speed safety program. The initiative will deploy automated enforcement systems across 125 sites identified as high-injury and crash-prone corridors, with operations expected to be fully functional by the end of 2026.
This program is part of a six-city pilot authorized by Assembly Bill 645, aiming to reduce traffic fatalities and modify driver behavior. By utilizing data-driven site selection, the city intends to address the persistent issue of speeding, which accounted for a significant portion of fatal and severe crashes in Los Angeles over recent years.
Verra Mobility Corporation (NASDAQ:VRRM) brings proven experience from successful programs in cities like San Francisco and Oakland. The company will implement privacy-focused technology and partner with local minority-owned firm Morgner Construction Management for installation. The deployment reflects a broader commitment to street safety, with data from other regions suggesting significant declines in both speeding and traffic fatalities.
Verra Mobility Corporation (NASDAQ:VRRM) provides smart mobility technology solutions. The company’s operations are divided into the following segments: Government Solutions, Commercial Services, and Parking Solutions.
10. Accenture (NYSE:ACN)
Number of Hedge Fund Holders: 64
Accenture (NYSE:ACN) is one of the underperforming tech stocks to buy according to analysts. On June 23, Accenture entered a multi-year partnership with the Seattle Seahawks, becoming the team’s first-ever global partner. This collaboration focuses on business transformation rather than traditional branding, leveraging Accenture’s expertise in technology, data, and AI to modernize the Seahawks’ data infrastructure, business operations, and fan engagement strategies.
A primary goal of the alliance is to support the Seahawks’ international expansion efforts. The partnership kicks off with the Accenture-presented “Trophy Tour,” which will bring the team’s Super Bowl championship hardware to fans in Germany, Australia, and Canada to capitalize on growing global interest in the NFL.
Beyond business and global growth, the partnership includes a commitment to community impact in Seattle. This deal adds to Accenture’s (NYSE:ACN) growing portfolio of sports collaborations aimed at reinventing the future of athletics through digital innovation.
Accenture (NYSE:ACN) is a global professional services company specializing in strategy, consulting, technology, and digital transformation. The company provides services in cloud computing, AI, security, and operations, helping organizations modernize systems and drive innovation across industries.
Hedge Fund Resource Center