In this article, we will take a look at the 5 most undervalued tech stocks to buy according to hedge funds. To see more such companies, go directly to 10 Most Undervalued Tech Stocks to Buy According to Hedge Funds.
5. Texas Instruments Incorporated (NASDAQ:TXN)
Number of Hedge Fund Holders: 59
Texas Instruments Incorporated (NASDAQ:TXN) is one of the most undervalued tech stocks to buy according to hedge funds. Texas Instruments Incorporated (NASDAQ:TXN) recently posted soft Q4 results, which was not a surprise amid the industry-wide downturn.
However, Texas Instruments Incorporated (NASDAQ:TXN)’s automotive segment posted strong performance in the period. Texas Instruments Incorporated (NASDAQ:TXN)’s automotive products are used in infotainment, driver assistance and safety systems. Texas Instruments Incorporated (NASDAQ:TXN) is one of the leaders in the analog semiconductor market with a 30% share.
As of the end of the third quarter of 2022, 59 hedge funds tracked by Insider Monkey reported having stakes in Texas Instruments Incorporated (NASDAQ:TXN). The total value of these stakes was about $1.8 billion. The biggest stakeholder in Texas Instruments Incorporated (NASDAQ:TXN) was Jean-Marie Eveillard’s First Eagle Investment Management which owns a $556 million stake in Texas Instruments Incorporated (NASDAQ:TXN).
Diamond Hill made the following comment about Texas Instruments Incorporated (NASDAQ:TXN) in its Q3 2022 investor letter:
“Other top contributors in Q3 included health insurance company Humana, semiconductor manufacturer Texas Instruments Incorporated (NASDAQ:TXN) and home improvement retailer Home Depot. Shares of Texas Instruments outperformed as the COVID lockdowns eased in China, and customers could accept the product shipments leading to an upside in expectations.”
4. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 68
Cisco Systems, Inc. (NASDAQ:CSCO) is one of the most notable technology stocks. Cisco Systems, Inc. (NASDAQ:CSCO) has increased its dividends for the last 11 years in a row. In December, Cisco Systems, Inc. (NASDAQ:CSCO) declared a $0.38 per share quarterly dividend. Forward dividend yield at the time came in at 3.15%. The dividend was payable on January 25.
Cisco Systems, Inc. (NASDAQ:CSCO) has diversified its business significantly over the past few years. It is no longer just a router or switches company. It has entered the enterprise hardware and software space. In the last quarter, over 40% of Cisco Systems, Inc. (NASDAQ:CSCO)’s revenue was generated through subscriptions.
As of the end of the third quarter, 68 hedge funds tracked by Insider Monkey reported having stakes in Cisco Systems, Inc. (NASDAQ:CSCO). The total value of these stakes was about $2.8 billion. The biggest stakeholder of Cisco Systems, Inc. (NASDAQ:CSCO) was John Overdeck and David Siegel’s Two Sigma Advisors, with a $388 million stake.
3. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 69
Intel Corporation (NASDAQ:INTC) stock got hammered after posting weak Q4 results and posting a Q1 guidance that shocked investors and analysts. Intel Corporation (NASDAQ:INTC) said weakness in client computing, datacenter and AI segments affected its numbers. For the first quarter of 2023, Intel Corporation (NASDAQ:INTC) is expecting to post a loss of $0.15 per share, excluding one-time items. Revenue in the period is expected to be between $10.5 billion and $11.5 billion. On the other hand, analysts were expecting Intel Corporation (NASDAQ:INTC) to post EPS of $0.25 for the first quarter. The disappointing guidance has several analysts issue ratings downgrades and bearish comments for Intel Corporation (NASDAQ:INTC). But Intel Corporation (NASDAQ:INTC) presents a long-term investment opportunity for those who can wait and have the stomach for risks.
2. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 80
QUALCOMM Incorporated (NASDAQ:QCOM), like other semiconductor stocks, is currently under pressure amid major supply chair issues and demand concerns. However, QUALCOMM Incorporated (NASDAQ:QCOM) bulls believe the company has several secular growth catalysts. QUALCOMM Incorporated (NASDAQ:QCOM) is set to benefit from the rise of IoT devices, smart home, AI and wireless technologies. QUALCOMM Incorporated (NASDAQ:QCOM) expects its IoT revenue to reach a whopping $9 billion by FY 2024, compared to $6.9 billion last year. QUALCOMM Incorporated (NASDAQ:QCOM) expects its annual revenue from the automotive segment to jump to $3.5 billion in five years, as compared to $1.4 billion last year. Perhaps the biggest growth driver for QUALCOMM Incorporated (NASDAQ:QCOM) is the upcoming 5G revolution.
A total of 80 hedge funds out of the 920 funds tracked by Insider Monkey had stakes in QUALCOMM Incorporated (NASDAQ:QCOM) as of the end of the third quarter. The total value of these stakes was about $2.6 billion.
Madison Funds made the following comment about QUALCOMM Incorporated (NASDAQ:QCOM) in its fourth-quarter 2022 investor letter:
“QUALCOMM Incorporated (NASDAQ:QCOM) continues to be challenged by headwinds in the smartphone supply chain with an expected decline in units for 2022. Despite solid gains in the Internet of Things and Auto segments, Qualcomm’s dominant business remains the smartphone market. We expect to see stabilization of the smartphone market in 2023, including a recovery in China.”
1. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 87
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the most undervalued tech stocks to buy according to hedge funds. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has a strong edge over its competitors in the industry. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is expanding its production capacities in the US to focus on N3 technology. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has been under pressure amid broader issues in the semiconductor industry. However, analysts believe as the demand of semiconductor products is expected to soar in the long term, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock will gain due to its fundamental strengths.
Hedge fund sentiment is strong for Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). A total of 87 hedge funds tracked by Insider Monkey reported having stakes in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). This was a big spike from 72 funds that had stakes in Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the second quarter.
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