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.
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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.
12. AppFolio, Inc. (NASDAQ:APPF)
Analyst Upside: 44.46%
Number of Hedge Fund Holders: 40
AppFolio, Inc. (NASDAQ:APPF) is one of the most oversold NASDAQ stocks to invest in. AppFolio, Inc. (NASDAQ:APPF) reported its fiscal Q4 and full year 2025 results on January 29, reporting a 22% year-over-year growth in fiscal Q4 revenue to $248 million. Total units under management rose 8% year-over-year to 9.4 million. Revenue for the full year 2025 also grew 20% year-over-year to $951 million. GAAP operating income for the year was $153 million, or 16.1% of revenue, compared to GAAP operating income of $136 million, or 17.1% of revenue in 2024.
Following the earnings release, DA Davidson cut the price target on AppFolio, Inc. (NASDAQ:APPF) to $275 from $325 on January 30, maintaining a Buy rating on the shares. The firm told investors that shares were down afterhours after a weaker-than-expected value-added services revenue and a prudent 2026 guide, overshadowing another solid quarter of earnings upside and unit growth. AppFolio, Inc. (NASDAQ:APPF) is continually benefiting from favorable upmarket new business trends and is ramping up adoption of premium subscription tiers and resident services, according to the firm.
The same day, Piper Sandler revised the price target on AppFolio, Inc. (NASDAQ:APPF) to $245 from $350 and maintained an Overweight rating, telling investors that while it understands investor frustration with the lack of frameworks or targets offered to increase visibility into the business, it also believes that the selloff is overdone.
AppFolio, Inc. (NASDAQ:APPF) provides industry-specific cloud-based business software solutions, data analytics, and services for the real estate industry. Its offerings include AppFolio Property Manager and AppFolio Investment Management, along with services designed to automate, enhance, and streamline workflows and processes for property management businesses.
11. Zillow Group (NASDAQ:ZG)
Analyst Upside: 52.42%
Number of Hedge Fund Holders: 74
Zillow Group (NASDAQ:ZG) is one of the most oversold NASDAQ stocks to invest in. On February 9, Keefe Bruyette adjusted the price target on Zillow Group (NASDAQ:ZG) to $80 from $65, maintaining a Market Perform rating on the shares and telling investors that the outcome of the Compass trial remains uncertain.
In another development, KeyBanc cut the price target on Zillow Group (NASDAQ:ZG) to $75 from $90 on February 6 and reaffirmed an Overweight rating on the shares. The firm updated the price target to take into account lower multiples across the internet and technology stocks, and believes that the company’s growth and margin profile remains intact. It thus considers the recent pullback as an attractive buying opportunity.
Zillow Group (NASDAQ:ZG) also received a rating update from Barclays on January 29, which upgraded the stock to Equal Weight from Underweight while raising the price target to $72 from $66. It told investors in a research note that the residential backdrop is “stable, but not yet inflecting”, but the company can post mid-teens revenue growth and faster EBITDA.
Zillow Group (NASDAQ:ZG) provides real estate and home-related information marketplaces on mobile and the web.
10. Nutanix, Inc. (NASDAQ:NTNX)
Analyst Upside: 53.99%
Number of Hedge Fund Holders: 47
Nutanix, Inc. (NASDAQ:NTNX) is one of the most oversold NASDAQ stocks to invest in. Goldman Sachs revised the price target on Nutanix, Inc. (NASDAQ:NTNX) to $60 from $75 on February 9, maintaining a Buy rating on the shares. The firm stated that an acceleration in AI innovation is visible, citing developments like Claude Cowork and OpenAI’s Frontier. While this warrants caution against over-anchoring to a single perspective, the firm’s analysis shows that most coverage lies in more insulated layers of the stack, which is creating attractive opportunities for investors who are willing to look through near-term volatility.
In another development, UBS cut the price target on Nutanix, Inc. (NASDAQ:NTNX) to $57 from $91 on February 9, maintaining a Buy rating after summing coverage of the stock. After checks, UBS believes that accelerating mid-teens growth is achievable in FY27-28, and it favors the risk/reward in the stock from here. Nutanix, Inc. (NASDAQ:NTNX) also received a rating update from Barclays on January 15, which downgraded the stock to Equal Weight from Overweight, bringing the price target down to $53 from $64.
Nutanix, Inc. (NASDAQ:NTNX) provides a cloud platform leveraging web-scale engineering and consumer-grade design. The company’s operations are divided into the following geographic segments: the United States, Europe, the Middle East, Africa, Asia Pacific, and Other Americas.
9. Bentley Systems, Incorporated (NASDAQ:BSY)
Analyst Upside: 57.50%
Number of Hedge Fund Holders: 27
Bentley Systems, Incorporated (NASDAQ:BSY) is one of the most oversold NASDAQ stocks to invest in. Bentley Systems, Incorporated (NASDAQ:BSY) was initiated with an Outperform rating and $48 price target by BMO Capital on January 22. According to the firm, Bentley Systems, Incorporated (NASDAQ:BSY) offers an “intriguing mix” of durable growth opportunities, with exposure to data centers and lower relative near-term AI disruption risk. It added that the company holds potential near-term catalysts from “reasonable” construction read-through data exiting 2025, along with possible U.S. permitting reform.
In another development, Oppenheimer also adjusted the price target on Bentley Systems, Incorporated (NASDAQ:BSY) to $53 from $65 on January 20, maintaining an Outperform rating on the shares. The firm told investors that a number of macro factors have affected stocks in its Industrial Efficiency coverage in the run-up to the fiscal Q5 2025 earnings season, including the Venezuela-U.S. military confrontation, rate cut dynamics, and the Nvidia Vera Rubin platform launch. While short-cycle and equipment-focused names have seen investor sentiment improve materially, it is cooling on data center-exposed stocks.
Bentley Systems, Incorporated (NASDAQ:BSY) provides software solutions for infrastructure engineering, enabling the work of structural, geotechnical, civil, and plant engineering practitioners, project delivery enterprises, and owner-operators of infrastructure assets. The company offers the construction, design, and operations of bridges and roads, water and wastewater, rail and transit, buildings and campuses, public works and utilities, mining, and industrial facilities.
8. Atlassian Corporation (NASDAQ:TEAM)
Analyst Upside: 61.45%
Number of Hedge Fund Holders: 60
Atlassian Corporation (NASDAQ:TEAM) is one of the most oversold NASDAQ stocks to invest in. On February 9, Citi adjusted the price target on Atlassian Corporation (NASDAQ:TEAM) to $160 from $210, maintaining a Buy rating on the shares after the fiscal Q2 report. The firm cited “sector turmoil” for the target cut, believing that the company’s fundamentals are “sound”.
In another development, Morgan Stanley revised the price target on Atlassian Corporation (NASDAQ:TEAM) to $290 from $320 on February 6, maintaining an Overweight rating on the shares. The firm told investors that fiscal Q2 did not show any signs of AI disruption, but instead “pointed to encouraging momentum with the Atlassian AI story”. However, Morgan Stanley also stated that a modest organic deceleration in cloud is “not enough to reverse the narrative” and calm investor concerns on AI risks.
The same day, Bernstein also adjusted the price target on Atlassian Corporation (NASDAQ:TEAM) to $290 from $304, keeping an Outperform rating. It stated that if the company is followed closely, fiscal Q2 marked a good quarter on most dimensions. However, the firm also stated that near-term operating complexity is not helping GenAI narrative worries, making it an additional challenge for investors. Bernstein does not believe the negative GenAI narratives and instead stated that Atlassian Corporation (NASDAQ:TEAM) is durable through GenAI disruption.
Atlassian Corporation (NASDAQ:TEAM) provides team collaboration and productivity software, offering products such as Jira Software, Confluence, Jira Service Management, and Loom.
7. DraftKings Inc. (NASDAQ:DKNG)
Analyst Upside: 63.55%
Number of Hedge Fund Holders: 68
DraftKings Inc. (NASDAQ:DKNG) is one of the most oversold NASDAQ stocks to invest in. Bernstein cut the price target on DraftKings Inc. (NASDAQ:DKNG) to $32 from $41 on February 6, maintaining an Outperform rating on the shares. The rating update came ahead of the quarterly results, with the firm telling investors that it anticipates DraftKings Inc. (NASDAQ:DKNG) to deliver strong fiscal Q4 results this month, supported by favorable sports results. Despite this sentiment, Bernstein believes that this alone would have little effect on investor concerns associated with challenges into 2026.
Canaccord also cut the price target on DraftKings Inc. (NASDAQ:DKNG) to $50 from $54 on February 3, maintaining a Buy rating on the shares. The firm stated that digital gambling stocks underwent a sell-off as investor concerns rose about state reports of decelerating handle trends in December that worsened in January. It added that the latest state data continues to suggest broadly in line Q4 results for digital gaming operators, with the weaker handle being offset by a strong hold and rebound of iGaming growth in December. Canaccord sees a favorable setup for DraftKings Inc. (NASDAQ:DKNG), with reset valuations and lowered expectations creating an attractive entry point for investors who are willing to look through short-term volatility.
DraftKings Inc. (NASDAQ:DKNG) is a digital sports entertainment and gaming company that provides online casino, online sports betting, retail sportsbook, daily fantasy sports product offerings, media, and other consumer product offerings.
6. The Trade Desk, Inc. (NASDAQ:TTD)
Analyst Upside: 77.56%
Number of Hedge Fund Holders: 42
The Trade Desk, Inc. (NASDAQ:TTD) is one of the most oversold NASDAQ stocks to invest in. The Trade Desk, Inc. (NASDAQ:TTD) has received several rating updates since the beginning of the year. Most recently, KeyBanc cut the price target on The Trade Desk, Inc. (NASDAQ:TTD) to $40 from $88 on February 3, keeping an Overweight rating on the shares. The firm updated the price target to reflect more conservative growth outlooks and EV/EBITDA multiples, telling investors that it anticipates another volatile quarter for SMID-cap ad earnings in a backdrop featuring competition for incremental ad budgets and positioning around agentic AI key themes.
In another development, Rosenblatt also revised the price target on The Trade Desk, Inc. (NASDAQ:TTD) to $53 from $64 on January 27, maintaining a Buy rating on the shares. The firm cited the “surprising termination” of CFO Alexander Kayyal after only five months on the job, adding in a research note for investors that the “surprising personnel volatility in this key post for now eviscerates the argument for a valuation premium to growth.”
The Trade Desk, Inc. (NASDAQ:TTD) provides a self-service and cloud-based ad-buying platform, offering omnichannel advertising, audience targeting, solutions for identity, application programming interface (API), custom, and programmatic, measurement and optimization.
5. Workday, Inc. (NASDAQ:WDAY)
Analyst Upside: 78.01%
Number of Hedge Fund Holders: 64
Workday, Inc. (NASDAQ:WDAY) is one of the most oversold NASDAQ stocks to invest in. On February 10, UBS adjusted the price target on Workday, Inc. (NASDAQ:WDAY) to $170 from $240 while maintaining a Neutral rating on the shares. Workday, Inc. (NASDAQ:WDAY) also received a rating update from Stifel on February 9, which adjusted the price target on the stock to $175 from $235 while maintaining a Hold rating on the shares. The rating update came after Workday, Inc. (NASDAQ:WDAY) announced the return of Aneel Bhusri as CEO, replacing Carl Eschenbach.
Stifel stated that it is not surprised by the departure of Eschenbach, as the company’s revival has proven considerably more challenging than initially expected when he took office as co-CEO in December 2022. The firm is choosing to believe that the decision was very recently made by the Board, since it was not announced concurrently with the force reduction last week. This likely translates to current operations failing to meet expectations, according to the firm. Stifel also stated that it would not be surprised if Workday, Inc. (NASDAQ:WDAY) sets fiscal year 2027 guidance below current Street expectations.
The same day, BTIG also revised the price target on Workday, Inc. (NASDAQ:WDAY) to $230 from $285, keeping a Buy rating on the shares following the Board’s appointment of Aneel Bhusri, co-founder and Executive Chair, as CEO. The firm believes that “the timing is ideal for Workday’s product-focused co-founder to retake the CEO helm”, and is optimistic about the company’s ability to navigate the evolving AI landscape.
Workday, Inc. (NASDAQ:WDAY) is involved in the development of enterprise cloud applications for finance and human resources. The company delivers human capital management, financial management, and analytics applications designed for educational institutions, companies, and government agencies.
4. Intuit Inc. (NASDAQ:INTU)
Analyst Upside: 83.87%
Number of Hedge Fund Holders: 96
Intuit Inc. (NASDAQ:INTU) is one of the most oversold NASDAQ stocks to invest in. Intuit Inc. (NASDAQ:INTU) received a rating update from BMO Capital on February 10, which adjusted the price target on the stock to $624 from $810 but maintained an Outperform rating.
TD Cowen also adjusted the price target on Intuit Inc. (NASDAQ:INTU) to $658 from $802 on February 9, keeping a Buy rating on the shares and telling investors that its moderately positive view on the setup is supported by expectations of a clean beat against a low bar following recent underperformance in shares. A more outright positive view is precluded by its expectation that until there is increased comfort on terminal values and AI impacts, investors would largely remain on the sidelines across the software space.
In another development, Intuit Inc. (NASDAQ:INTU) announced on February 2 a new multi-year partnership with Affirm, under which the latter would become the exclusive pay-over-time solution built into QuickBooks Payments. This would further bolster Intuit Inc.’s (NASDAQ:INTU) end-to-end financial management capabilities that help expedite how businesses manage and grow their operations. QuickBooks offers resources to millions of small and mid-market businesses to manage their business. The partnership would allow several of them to offer Affirm’s flexible payment options to their customers while allowing them to maximize sales, boost conversion rates, and improve cash flow.
Intuit Inc. (NASDAQ:INTU) provides business and financial management solutions. Its operations are divided into the following segments: Small Business and Self-Employed, Consumer, Credit Karma, and ProTax.
3. Coinbase Global, Inc. (NASDAQ:COIN)
Analyst Upside: 96.14%
Number of Hedge Fund Holders: 73
Coinbase Global, Inc. (NASDAQ:COIN) is one of the most oversold NASDAQ stocks to invest in. JPMorgan cut the price target on Coinbase Global, Inc. (NASDAQ:COIN) to $290 from $399 on February 10, reaffirming an Overweight rating on the shares ahead of the fiscal Q4 report. Coinbase Global, Inc. (NASDAQ:COIN) also received a rating update from Citi on February 9, which cut the price target on the stock to $400 from $505 while keeping a Buy rating on the shares.
In another development, BTIG revised the price target on Coinbase Global, Inc. (NASDAQ:COIN) to $340 from $420 on February 5. The firm released the rating update ahead of the company’s fiscal Q4 report on February 12, and maintained a Buy rating on the shares. It told investors in a research note that the stock has fallen 49% since the Q3 report, in comparison to the total crypto market cap falling 32%.
BTIG sees an attractive entry point for Coinbase Global, Inc.’s (NASDAQ:COIN) at current share levels, adding that the company is “creating a flywheel” between its trading business and digital asset applications. It sees the fiscal Q4 report showing the company’s revenue diversification beyond “volatile” transaction revenues. Coinbase Global, Inc. (NASDAQ:COIN) also received a rating update from Barclays on February 3, which maintained a Hold rating on the stock with a $258 price target.
Coinbase Global, Inc. (NASDAQ:COIN) provides a platform for customers to engage with crypto assets and offers critical infrastructure for the on-chain economy. The company offers services and products to three customer groups: Consumers, Institutions, and Developers.
2. Summit Therapeutics Inc. (NASDAQ:SMMT)
Analyst Upside: 123.74%
Number of Hedge Fund Holders: 27
Summit Therapeutics Inc. (NASDAQ:SMMT) is one of the most oversold NASDAQ stocks to invest in. On February 2, H.C. Wainwright reaffirmed a Buy rating on Summit Therapeutics Inc. (NASDAQ:SMMT) with a price target of $40.00. The firm views FDA’s acceptance of the Biologics License Application for ivonescimab in EGFR‑mutated NSCLC as a meaningful de‑risking event, stating that it shows the filing is complete enough to merit full review. This sets a clear timeline towards a potential U.S. approval decision by November 2026.
The firm’s valuation work is based on a discounted cash flow model, yielding an enterprise value of around $34 billion and supporting a 12‑month price target of $40 per share, which is underpinned by an 8% discount rate and 4% terminal growth rate. The assumptions point towards H.C. Wainwright’s confidence in the ivonescimab data set and the well‑validated nature of PD‑1 as a target.
The rating update came after Summit Therapeutics Inc. (NASDAQ:SMMT) announced on January 29 that the FDA accepted for filing the company’s Biologics License Application seeking approval for ivonescimab in combination with chemotherapy in patients with epidermal growth factor receptor-mutated locally advanced or metastatic non-squamous non-small cell lung cancer post-tyrosine kinase inhibitor therapy. Management reported that the FDA provided a Prescription Drug User Fee Act goal action date of November 14, 2026.
Summit Therapeutics Inc. (NASDAQ:SMMT) is a biopharmaceutical company that specializes in creating novel medications for infectious and cancerous diseases.
1. MicroStrategy Incorporated (NASDAQ:MSTR)
Analyst Upside: 166.37%
Number of Hedge Fund Holders: 43
MicroStrategy Incorporated (NASDAQ:MSTR) is one of the most oversold NASDAQ stocks to invest in. MicroStrategy Incorporated (NASDAQ:MSTR) provided an update on its Bitcoin holdings in a regulatory filing on February 9, reporting that it acquired 1,142 bitcoin for approximately $90 million at an average purchase price of $78,815 between February 2 and February 8. The company now holds 714,644 bitcoin as of February 8, acquired for an aggregate purchase price of approximately $54.35 billion.
In another development, MicroStrategy Incorporated (NASDAQ:MSTR) received a rating update from Maxim Group on February 6, which maintained a Buy rating on the stock and highlighted its position as a leading digital asset treasury vehicle involved in aggressively expanding its Bitcoin holdings through sizable equity and preferred stock financings. The company now controls a very significant Bitcoin position relative to its share base, according to the firm. It further stated that despite a challenging Bitcoin backdrop featuring a material drawdown, MicroStrategy Incorporated (NASDAQ:MSTR) holds a strong balance sheet supported by solid access to capital and considerable digital assets.
MicroStrategy Incorporated (NASDAQ:MSTR) engages in the development of the Bitcoin network through its operations in technology, financial markets, and advocacy. It is the world’s largest corporate holder of Bitcoin.
While we acknowledge the potential of MSTR to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MSTR and that has 100x upside potential, check out our report about this cheapest AI stock.
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