In this article, we will discuss the 13 Cheap AI Stocks to Buy According to Analysts.

As per Morgan Stanley, in 2025, technology companies are expected to maintain their focus on building AI platforms catering to their enterprise customers’ needs for optimized performance, profitability, and security. The companies have been partnering throughout the AI ecosystem of chip companies, hyperscalers, large language models, data, and software companies. At the same time, they have been tackling the unknowns of US trade policy and resource constraints.

AI Revolution- Biggest Tech Transformation

Wedbush analyst Daniel Ives has been constantly discussing the AI Revolution over the past few years. This is because he believes that this industry exhibits the biggest tech transformation in more than 40 years. As per Ives, the global AI market is projected to touch $407 billion by 2027 and $1.81 trillion by 2030, exhibiting a CAGR of 36%. Amidst such growth potential, several industries have been choosing AI in a bid to solve complex problems and optimize business processes through the use of advanced algorithms, ML, and data analysis techniques, added Daniel Ives.

Since the world generates ~400 terabytes of data on a daily basis, and 90% of the world’s data was generated over the previous 2 years, the analyst believes that several companies continue to look for ways to leverage their datasets to power AI initiatives. The focus is to generate witness operational efficiencies through the automation of repetitive tasks.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

Factors Affecting the Growth of the AI Industry

FTI Consulting believes that AI-native companies, which have been developed around foundational and proprietary AI technologies, have seen strong investor interest, and this premium is expected to continue in 2025. Despite high-forward multiples, several AI companies demonstrated strong revenue growth and exhibited sustained earnings, which have kept pace with price. Moving forward, the firm believes that, in 2025, the stronger AI-native companies are expected to develop healthy ARR. The investors will look to balance portfolio risk through emphasizing investment in such companies possessing clear potential for mid-term revenue and profitability, as compared to companies having more long-term prospects.

FTI Consulting also opines that PE investment in AI or AI-influenced targets continues to rise. In 2025, the focus is expected to be on investments fueling significant cost efficiencies with relatively predictable AI applications. Also, the firm sees M&A activity in the broader AI sector to be strong in 2025.

Amidst such favourable investment trends, let’s take a look at the 13 Cheap AI Stocks to Buy According to Analysts.

Our Methodology

To list the 13 Cheap AI Stocks to Buy According to Analysts, we sifted through several online rankings to shortlist companies that cater to the broader AI sector and the ones that trade at a forward P/E of less than ~15.0x. Finally, we chose the companies that analysts see upside to. The stocks are ranked in ascending order of their average upside potential, as of May 12. We also mentioned hedge fund sentiments around each stock, as of Q4 2024.

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).

13 Cheap AI Stocks to Buy According to Analysts

13. Gen Digital Inc. (NASDAQ:GEN)

Number of Hedge Fund Holders: 40

Average Upside Potential: ~8%

Forward P/E as of May 12: ~11.6x

Gen Digital Inc. (NASDAQ:GEN), a cybersecurity firm, integrates AI into its products and services to improve digital safety and user protection. Analyst Tomer Zilberman from Bank of America Securities reiterated a “Buy” rating on the company’s stock with a price objective of $33.00. The company announced that it has successfully closed the acquisition of MoneyLion Inc. MoneyLion’s assets, such as its AI recommendation engine, together with Gen Digital Inc. (NASDAQ:GEN)’s growing customer base and ARPU, offer opportunities for efficiencies in customer acquisition. The company is anticipating leveraging the volume from both businesses to fuel margin improvements and make growth investments.

Gen Digital Inc. (NASDAQ:GEN) opines that there is a key need for smaller AI-driven anti-scam technologies capable of analyzing behavior in real time and stopping attacks before impacting consumers. Gen Digital Inc. (NASDAQ:GEN) has significantly enhanced its AI-driven threat detection capabilities by enhancing existing security engines and also creating new engines to enhance the protection leadership throughout additional channels, such as SMS, emails, or phone calls. The company highlighted that Northern Genie boosted its overall scam detection efficacy tenfold since its release. Notably, Genie happens to be a significant advancement when it comes to threat detection and defense, and has been tagged as a true AI-powered cyber safety companion. With cyber threats becoming increasingly sophisticated, the demand for Gen Digital Inc. (NASDAQ:GEN)’s advanced threat detection and prevention tools is expected to increase, aiding revenue growth.

12. Zoom Communications Inc. (NASDAQ:ZM)

Number of Hedge Fund Holders: 48

Average Upside Potential: ~9.3%

Forward P/E as of May 12: ~14.9x

Zoom Communications Inc. (NASDAQ:ZM) is engaged in providing an AI-first work platform for human connection. Analyst Sachin Mittal of DBS is optimistic about the company’s stock as a result of factors demonstrating the company’s growth potential and strategic positioning. The analyst noted the company’s investment in a unified communications platform. This consists of a variety of products like chat, phone, and video conferencing, exhibiting potential for long-term growth. Furthermore, the introduction of the AI Companion Add-On demonstrates a transition towards AI-driven revenue streams, which can reduce churn, and there can be seamless integration with enterprise workflows, added the analyst.

Zoom Communications Inc. (NASDAQ:ZM) highlighted that AI Companion has been evolving from a personal assistant to being truly agentic, signaling a strong leap forward in how AI can enhance productivity and collaboration. Overall, the growth in the broader AI industry will strengthen Zoom Communications Inc. (NASDAQ:ZM)’s growth prospects by improving its platform with features such as AI-powered meeting summaries, virtual agents, etc. The company’s AI-enhanced products continue to attract significant enterprise customers and enhance subscription value. With businesses adopting AI-enabled workflows, the company tends to benefit from global reach and increased demand.

Guinness Global Innovators, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“Zoom Communications Inc. (NASDAQ:ZM) has struggled since coming out of the pandemic with changing consumer trends and a tougher macroeconomic environment. At purchase, Zoom looked attractive from a valuation perspective, having derated from its 2021 highs to near pre-pandemic levels – despite being a fundamentally better business. The company had built a strong brand, with ‘Zoom’ becoming synonymous with online conferencing and video calling after the company’s success during the pandemic, and the resulting paradigm shift towards increased hybrid working. What was once a more ‘speculative’ growth stock at the start of the pandemic, was now a slightly more mature growth company with high market share (underpinned by a best-in-class product), stickier revenues, and a stronger balance sheet with $5bn in cash creating room for growth investment. With a superior product and strong brand presence, growth expectations for the company were around mid to high single digits. However, since purchase, Zoom has returned -34% versus the MSCI World Index, which was up 28%, with a growth profile that has disappointed. The company’s key Enterprise segment has seen decelerating growth, with both customer growth and the net dollar expansion rate (Zoom’s revenue per user metric slowing significantly). Customer growth has slowed from a rate of 25% YoY in the quarter prior to purchase to an estimated 3.6% by the first quarter of 2024. Net Dollar Expansion rate has slowed even further, currently at 101% (1Q24) vs c.123% at purchase…” (Click here to read the full text)

11. Leidos Holdings, Inc. (NYSE:LDOS)

Number of Hedge Fund Holders: 51

Average Upside Potential: ~12.7%

Forward P/E as of May 12: ~14.5x

Leidos Holdings, Inc. (NYSE:LDOS) integrates AI into its core operations, mainly in defense, healthcare, intelligence, and cybersecurity.  Truist upped the company’s price objective to $175 from $155, keeping a “Buy” rating on the company’s stock after its Q1 2025 earnings beat. The company posted non-GAAP diluted EPS of $2.97, reflecting 30% growth YoY.  The company is committing $10 million to accelerate the use of AI for detecting and managing diseases, together with the University of Pittsburgh’s Computational Pathology and AI Center of Excellence (CPACE).

Leidos Holdings, Inc. (NYSE:LDOS)’s investment is focused on using the evolutionary power of AI to accelerate detection, diagnosis, and treatment of diseases impacting millions of people annually. Also, Protect AI is collaborating with Leidos Holdings, Inc. (NYSE:LDOS) to strengthen security for AI systems utilised by the US government agencies. Both companies focus on delivering full lifecycle security capabilities throughout the entire AI supply chain for national security, intelligence, defense, healthcare, and civil agencies, aligning with government standards and enabling secure AI innovation. Leidos Holdings, Inc. (NYSE:LDOS) and SeeTrue are partnering to boost the efficiency of airport security and customs screenings with the help of AI-enabled algorithms for detecting prohibited items.​