In this article, we will discuss: 8 Most Undervalued AI Stocks to Buy According to Hedge Funds.
On May 29, Reuters reported that Joachim Klement, investment strategist at Panmure Liberum, said that investors should consider the risks of a reversal in the AI investment bubble. He noted historical downturns following major technology cycles. He stated that annual spending on technology equipment and software had hit $1.5 trillion, which is around 70% higher than the inflation-adjusted peak of the late-1990s dotcom boom. Klement cited Bureau of Economic Analysis data to show that tech investment plummeted 5% after 1969 and 18.6% in the two years following 2000.
According to Klement, a 5% decline in US technology investment may reduce real GDP by up to one percentage point across the US, the UK, and the eurozone. He calculated that a 4.5% correction would result in a 15% reduction in the US market and over 20% losses in Europe, while a 6% investment drop would send both countries into recession, with declines reaching 20% in the US and 30% in Europe.
With that said, here are the 8 Most Undervalued AI Stocks to Buy According to Hedge Funds.
Methodology:
We used screeners to identify AI stocks that are trading below a forward P/E of 15 and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds. We then identified those with the highest number of hedge fund holders, which we assessed using Insider Monkey’s database of hedge funds as of Q1 2026. The stocks are ranked in ascending order of the number of hedge fund holders.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
8. UiPath, Inc. (NYSE:PATH)
Number of Hedge Fund Holders: 40
Forward P/E: 13.95
On May 29, 2026, BofA raised its price target on UiPath, Inc. (NYSE:PATH) to $13 from $12. The firm maintained an “Underperform” rating on the shares. It noted fiscal Q1 results that came in above both its estimates and the Street and a higher full-year outlook. BofA said the print was “likely good enough” given valuation but flagged the need for clearer ARR acceleration before turning constructive.
A day earlier, on May 28, UiPath, Inc. reported first-quarter 2027 results with revenue of $418 million, growing by 17% year over year. The ARR of $1.901 billion jumped by 12%, and GAAP operating income was $28 million. On the other hand, non-GAAP operating income was $92 million.
CEO Daniel Dines said ARR growth reached 12% as agentic products moved from pilot to production, while CFO Ashim Gupta said the corporation exceeded guidance across key metrics and achieved its first quarter of GAAP profitability.
UiPath, Inc. is a firm that works in the development and provision of a software platform to automate business processes.
7. Atlassian Corporation (NASDAQ:TEAM)
Number of Hedge Fund Holders: 44
Forward P/E: 14.27
On May 1, 2026, Reuters reported that Atlassian Corporation (NASDAQ:TEAM) raised its annual revenue growth forecast to about 24% from 22%. The firm is counting on AI-driven features and the enterprise segment to sustain growth. The company beat quarterly expectations, reporting revenue of $1.79 billion as compared to $1.69 billion estimated by LSEG. It also posted adjusted EPS of $1.75 against $1.32 expected, Reuters reported.
Shares jumped more than 18% in extended trading. CFO James Chuong told Reuters that cloud revenue grew by 29% year over year, pointing to strong seat expansion in Jira along with rising usage of AI features.
Reuters said demand for core products like Jira remained solid because of deep enterprise integration, even though customer budgets softened. The growth also benefited from shifts to cloud and data center offerings. The corporation cut roughly 10% of its workforce, or 1,600 roles, in March to refocus on AI and enterprise sales.
Atlassian Corporation is a holding company that provides team collaboration and productivity software. Its products include Jira Software, Confluence, Jira Service Management, and Loom.
6. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 49
Forward P/E: 12.99
On May 27, 2026, Super Micro Computer, Inc. (NASDAQ:SMCI) reported that a leading European AI cloud provider, Verda, selected its NVIDIA GPU-accelerated, rack-scale systems to power AI cloud infrastructure across Europe. It is targeting customers in Europe, the US, and Asia. The company said the deployment uses liquid-cooled, Blackwell-based systems to enable large language models, multimodal AI, robotics, and enterprise applications.
President and CEO of Super Micro Computer, Inc. Charles Liang said the firm’s design and engineering, combined with NVIDIA Blackwell systems, “enable customers like Verda to rapidly deploy high-performance, energy-efficient AI infrastructure at scale.” Ruben Bryon, Verda’s CEO, said partnering with Supermicro helps deliver “AI-native infrastructure” globally.
Super Micro Computer, Inc. said Verda’s platform gives self-service AI infrastructure through instances, clusters, and managed inference endpoints. Verda is operating on 100% renewable energy. It also stated that excess data center heat will support heating for up to 15,000 homes, along with placements of GB300 NVL72, HGX B300, HGX B200, and RTX PRO 6000 systems.
Super Micro Computer, Inc. operates as a seller and developer of server and storage solutions based on modular, open-standard architecture across Europe, the United States, Asia, and internationally. It provides liquid and air-cooled AI servers.
5. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 63
Forward P/E: 12.24
Workday, Inc. (NASDAQ:WDAY) is among the Best Undervalued Stocks.
On May 21, 2026, The Wall Street Journal reported that Workday, Inc.‘s Chief Executive, Chair, and Co-founder Aneel Bhusri is leading the company through a “re-founding” moment after returning as chief executive in February. He argues AI demands a startup-style reset. Bhusri told the Journal the corporation must “think like a startup again,” describing efforts to rebuild product ownership and accountability.
The Journal reported Bhusri has made an AI task force and consolidated terms around AI agent products, cutting the company’s internal agent count from 50 to about 20 to focus on “the ones that really matter.” Gerrit Kazmaier, Workday’s president and head of product and technology, said the firm plans to release about 15 new agents in 2026. This includes tools for corporate travel and IT service management built on its Sana acquisition.
Bhusri said he has spoken to over 100 customers who are not looking to replace Workday, Inc.’s HR and finance software, and “If they do, I’d say, ‘Welcome to the swamp.”
Workday, Inc. develops enterprise cloud applications for finance and human resources. It provides financial management, human capital management, and analytics solutions for businesses, educational institutions, and government bodies.
4. Accenture plc (NYSE:ACN)
Number of Hedge Fund Holders: 64
Forward P/E: 10.29
On April 27, 2026, Reuters reported that Microsoft is bringing out its Copilot 365 AI assistant to roughly 743,000 Accenture plc (NYSE:ACN) employees. This marks what it calls the biggest enterprise deal for the chatbot as it pushes to convert more users into paid subscriptions. Financial terms were not disclosed in the joint statement.
Reuters reported that Microsoft’s M365 and Copilot platform head Charles Lamanna said expanding support for multiple AI models, including Anthropic and a “Critique” tool that uses one model to check another, is supporting demand. The effort plans to reduce reliance on OpenAI while broadening enterprise use.
Accenture plc (NYSE:ACN)’s CEO Julie Sweet said in a statement that “our teams are already doing higher-value work because of it.” The company said 97% of staff reported Copilot helped complete routine tasks up to 15 times faster, with 53% reporting major productivity gains.
Accenture plc (NYSE:ACN) is a multinational professional services firm that helps corporations, governments, and other organizations develop their digital core, streamline their operations, accelerate revenue growth, and improve citizen services, resulting in concrete value at speed and scale. It operates in three geographical segments: North America, EMEA, and Growth Markets.
3. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 86
Forward P/E: 10.29
On April 20, 2026, CNBC reported that Adobe Inc. (NASDAQ:ADBE)’s Chief Executive Officer, Shantanu Narayen, in an interview, said he plans to step down after nearly two decades leading the company. He framed the decision around strategy execution as artificial intelligence reshapes software. He told CNBC that “it was really important that we got our strategy in place” and that he feels “really good about the strategy” and innovation spanning Firefly models to enterprise tools.
Narayen pointed to quick technological change, telling CNBC that AI will “revolutionize how creativity happens” while expanding opportunities for creative and marketing software. He pushed back on concerns about disruption, stating “the bears have it all wrong,” and acknowledged the need to manage new interfaces and computing modalities.
Scale remains central, as Narayen said Adobe Inc. now serves 70 billion profiles, processes 35 trillion transactions a day, and reaches about 850 million monthly users across Acrobat, Express, and Creative Cloud.
Adobe Inc. is a global technology company operating through the following segments: Digital Media, Digital Experience, and Publishing and Advertising.
2. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 101
Forward P/E: 13.39
On May 27, 2026, CNBC reported that Salesforce, Inc. (NYSE:CRM)’s Q1 fiscal 2027 results beat estimates while guiding slightly below expectations. The company had adjusted EPS of $3.88 while revenue was $11.13 billion, growing by 13% year over year. The net income jumped to $2.11 billion from $1.54 billion.
CNBC reported a remaining performance obligation of $67.9 billion, missing the $68.61 billion consensus. The full-year revenue guidance of $45.9 billion to $46.2 billion came in slightly below estimates despite adjusted EPS guidance of $14.06 to $14.12.
Chief Operating and Financial Officer Robin Washington said the outlook shows “continuing challenges in marketing and commerce” and “worsening performance in Tableau bookings and renewals.” He also noted that Informatica contributed to license revenue volatility.
Salesforce, Inc.’s Agentforce annualized revenue reached $1.2 billion, up 205% year over year, surpassing $1 billion for the first time.
Salesforce, Inc. develops cloud-based enterprise software for customer relationship management. It provides sales force automation, customer service and support, marketing automation, digital commerce, community management, collaboration, industry-specific solutions, and the Salesforce platform.
1. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 154
Forward P/E: 9.39
On May 26, 2026, Reuters reported that Micron Technology, Inc. (NASDAQ:MU) briefly surpassed a $1 trillion market value with shares jumping 17.4% to $881.6 after rising as much as 19.3% intraday. The surge came after UBS lifted its price target to $1,625 from $535, the highest among the 46 brokerages covering the firm, as per LSEG data.
The move brings to an end what Reuters described as a “dizzying rally.” The shares climbed more than eightfold in 12 months because of strong earnings and supply constraints, giving it pricing power.
“The need for pure memory has increased rapidly,” Art Hogan told Reuters, noting Micron Technology, Inc. “sits at the center” of AI-driven demand.
Reuters said the company’s 2026 high-bandwidth memory supply is already sold out. The next-gen HBM4 chips have entered production, showing tightening capacity as data center investment accelerates.
Micron Technology, Inc. is the U.S.’s largest memory chipmaker. It operates in four business units: Compute and Networking Business Unit, Mobile Business Unit, Embedded Business Unit, and Storage Business Unit.
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