5 Best Underperforming Tech Stocks to Buy for a Turnaround

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In this article, we will list the 5 Best Underperforming Tech Stocks to Buy for a Turnaround. Please visit 10 Best Underperforming Tech Stocks to Buy for a Turnaround if you’d like to see an extended list.

To build our list of the 10 Best Underperforming Tech Stocks to Buy for a Turnaround, we screened technology stocks that had meaningfully lagged the broader market or traded well below their recent highs, while still having credible recovery catalysts such as improving fundamentals, analyst upside, AI-related product shifts, or resilient core demand. We then ranked the stocks in descending order of short interest as a percentage of float.

5. ServiceNow, Inc. (NYSE:NOW)

Short Percentage of Float: 4.79%

ServiceNow, Inc. (NYSE:NOW) is one of the best underperforming tech stocks to buy for a turnaround. The latest support for the recovery case came on May 19, when Bank of America reinstated coverage of ServiceNow with a Buy rating and a $130 price target. Barron’s reported that BofA viewed ServiceNow as an AI beneficiary because its workflow platform is deeply embedded in enterprise systems, making it harder to displace as companies deploy AI agents. The stock rose sharply after the note, but was still down about 32% in 2026, keeping the underperformance angle intact.

5 Best Underperforming Tech Stocks to Buy for a Turnaround

Copyright: welcomia / 123RF Stock Photo

The product case also improved on May 5, when ServiceNow launched Action Fabric, opening its “system of action” to AI agents built on ServiceNow, Claude, Copilot, or customers’ own stacks through its generally available Model Context Protocol server. The idea is that AI agents should not just read enterprise data, but execute governed work through approvals, workflows, audit trails, identity controls, and role-based permissions. That fits the turnaround thesis because AI could increase the need for ServiceNow’s orchestration layer rather than make it obsolete.

There are still risks. Reuters reported on April 22 that the stock fell after delays to the Middle East deal hurt first-quarter subscription revenue growth. However, ServiceNow also raised its 2026 subscription revenue outlook, reported $3.77 billion in first-quarter revenue, and beat earnings expectations.

ServiceNow, Inc. (NYSE:NOW) provides an AI-enabled enterprise platform for workflows across IT, security, risk, HR, finance, legal, procurement, customer service, and related business functions.

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