In this article, we will look at the 13 Oversold NASDAQ Stocks to Invest In.
On February 6, Richard Bernstein, Richard Bernstein Advisors CEO, appeared on CNBC’s ‘The Exchange’ to talk about the state of equity markets. He stated that we have argued for a long time that the broadening of the market would be extraordinarily healthy, and that has been going on since the end of October, more or less. He thinks this is “very healthy”, and that people are not realising how strong the overall economy is, with nominal GDP last quarter over 8%.
For perspective, excluding the post-pandemic period, the United States has not had a nominal GDP over 8% since 2006. So you would have a narrow market when the nominal GDP is over 8% is mind-boggling, according to him. Therefore, what we are witnessing is the market beginning to broaden, in acceptance of the economy, and the corporate profits are turning out to be much stronger and much broader than people thought.
READ ALSO: 12 Best Healthcare Stocks Under $50 to Invest In AND 11 Best E-commerce Stocks to Buy Now.
Bernstein further stated that the key thing for the Mag 7 is that they are fine companies, but they are not unique, as there are many companies both in the United States and across the globe that are growing as fast, if not faster, than the Mag 7, and are a lot cheaper as well. He added that if people are willing to look outside the United States, they are likely to find earnings growth accelerating in many parts of the world. It is not that the U.S. earnings growth is imploding, but rather it is leveling off and maybe coming down a little bit. On the other hand, outside the United States, we have profit cycles that are actually coming up.
With these trends in view, let’s look at the best oversold NASDAQ stocks to invest in.
Our Methodology
We sifted through the Finviz stock screener to compile a list of oversold NASDAQ stocks that have declined by at least 25% over the past six months but for which analysts see potential to recover. We then selected 13 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of analyst upside. We have also added the hedge fund sentiment for each stock, as of Q3 2025.
Note: All data was recorded on February 6.
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).
13 Oversold NASDAQ Stocks to Invest In
13. Paylocity Holding Corporation (NASDAQ:PCTY)
Analyst Upside: 40.79%
Number of Hedge Fund Holders: 44
Paylocity Holding Corporation (NASDAQ:PCTY) is one of the most oversold NASDAQ stocks to invest in. Mizuho reiterated a Buy rating on Paylocity Holding Corporation (NASDAQ:PCTY) on February 10, setting a price target of $150.00. Paylocity Holding Corporation (NASDAQ:PCTY) announced its fiscal Q2 2026 financial results on February 5, with recurring and other revenue coming up to $387.0 million, and reflecting a growth of 11.3% compared to the prior year period. Total revenue for the quarter was $416.1 million, up 10.4% compared to fiscal Q2 2025. The company also reported continued growth in cash flows, with a trailing twelve months net cash provided by operating activities margin of 28.3% and free cash flow margin of 23.6%.
Paylocity Holding Corporation (NASDAQ:PCTY) received several rating updates following the results, including Baird adjusting the price target on the stock to $220 from $245 on February 6 and maintaining an Outperform rating on the shares. It told investors that it updated its model after the results showed outstanding progress on margins and free cash flow. The same day, TD Cowen also adjusted the price target on Paylocity Holding Corporation (NASDAQ:PCTY) to $178 from $188 while maintaining a Buy rating on the shares. The firm stated that the company reported a respectable fiscal Q2 beat and delivered a confident message on moat from AI displacement and depressed valuation, supportive to shares.
Paylocity Holding Corporation (NASDAQ:PCTY) develops and provides cloud-based software solutions, including cloud-based payroll, applications, human capital management, benefits administration, time labor tracking, and talent management.
