The US Federal Reserve should cut rates, rather than ease them, in response to higher inflation driven by a spike in energy prices caused by the US-Iran war. This is according to Barry Knapp, Ironsides’ macroeconomics managing partner, during an interview with CNBC on March 3.
Barry argued that weak consumer demand, as shown by the deceleration in goods and services consumption, will weaken further due to supply-pull inflation. As such, there is no real risk of the economy overheating if the US Fed were to cut rates despite the inflation.
He further added that a rate cut would do wonders for the Americans in the bottom half of what economists describe as the “K-shaped economy,” as he believes that the Fed’s policy rates are currently at least 50 basis points too tight for small banks, small businesses, and households who do not own assets. A rate cut to ~3.00% would steepen the yield curve and would incentivize small banks to lend to consumers and small businesses, leading to higher growth.
This scenario, as described by Barry, would also likely provide relief to stock market valuation multiples, a part of which has been under pressure from AI concerns. This is because two of the factors that drive a stock’s justified P/E multiple, according to the Gordon Growth Model, are interest rate levels and terminal growth rate.
When interest rates decline, the required return on equity (also known as the cost of equity) falls, leading to a higher justified P/E multiple. When growth rates rise, the justified P/E multiple rises.
Let us now take a look at the 15 most undervalued NASDAQ stocks to buy, according to Wall Street analysts.
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Our Methodology
We screened stocks listed on the NASDAQ with at least $2 billion in market capitalization, at least three analysts covering them, at least 25% median projected upside from analysts, and a forward price-to-earnings (P/E) ratio between 3x and 15x. We then filtered the list to only contain stocks with at least 15 hedge fund holders, according to Insider Monkey’s proprietary hedge fund database, which tracks over 1,000 hedge funds as of Q4 2025. Finally, we selected and ranked the 15 stocks with the highest median projected upside from analysts. When two or more stocks were tied on upside, we used the number of hedge fund holders as a tiebreaker.
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).
Note: All data presented are as of 03 March 2026.
15. American Airlines Group Inc. (NASDAQ:AAL)
American Airlines Group Inc. (NASDAQ:AAL) is one of the 15 Most Undervalued NASDAQ Stocks to Buy According to Wall Street Analysts.
Rothschild & Co Redburn, on March 5, downgraded its call on American Airlines to a Neutral (from Buy), with a $12.50 target price. The firm cited the US-Iran war, which will add “disruptive pressures and material fuel cost inflation,” as the main reason for this rating downgrade.
Note that Goldman Sachs, on March 4, already increased its Q2 Brent crude oil price forecasts by ~15% to $76 per barrel (vs. the initial forecast of $66 per barrel). The firm also warned that a prolonged war and closure of the Strait of Hormuz could send oil prices flying to ~$100 per barrel.
“If Hormuz volumes were to remain flat for 5 additional weeks, Brent prices would likely reach $100, a level associated with larger demand destruction to prevent inventories from falling to critically low levels.”
For context, AAL’s fuel expenses in 2025 were equivalent to roughly 20% of its revenue. Therefore, a ~15% increase in average oil prices to ~$76 per barrel would reduce AAL’s operating margins by 3 percentage points, assuming AAL does not increase its prices. A ~52% increase in average oil prices to ~$100 per barrel (which would be the case in a prolonged closure of the Strait of Hormuz) would reduce AAL’s operating margins by 10 percentage points.
American Airlines Group Inc. (NASDAQ:AAL), through its subsidiaries, offers passenger and cargo air transportation services in the United States, Latin America, the Atlantic, and the Pacific. The company is headquartered in Fort Worth, Texas, and was established on December 9, 2013, through a merger.
14. CarGurus Inc. (NASDAQ:CARG)
CarGurus Inc. (NASDAQ:CARG) is one of the 15 Most Undervalued NASDAQ Stocks to Buy According to Wall Street Analysts.
On February 24, Oppenheimer trimmed its target price on CarGurus by 5.0% to $38 (from $40) but retained the firm’s Outperform call on the stock. The AI disruption narrative, which compressed valuation multiples of tech and software companies – ultimately driving down CarGuru’s stock price this year (down ~18% year to date)- was a key factor for this target price cut. The firm, however, believes that CARG’s best-in-class used car proprietary valuation data, good dealer relationships, and AI-adoption insulate it from LLM disruption and, thus, the overweight rating.
Oppenheimer also sees potential upside for CARG, as new products and features (such as PriceVantage, New Car Exposure, CG Discover, and Dealership Mode) benefit from the company’s scale, leading to high incremental margins.
Lastly, the firm likes what it saw in management’s 2026 revenue guidance (released on February 19 along with the company’s Q4 2025 earnings), which implied that subscription upgrades and higher new-product attach rates will deliver durable U.S. quarterly average revenue per subscribing dealer (QARSD) pricing.
CarGurus Inc. (NASDAQ:CARG) is an online automotive platform for buying and selling vehicles. The company’s car listings marketplace features digital retail solutions and the CarOffer digital wholesale platform. CarGurus operates through segments, including the customer-facing U.S. Marketplace and the Digital Wholesale division, which provides dealer-to-dealer services and products sold on the CarOffer platform.
