In this piece we will look at the 5 Most Undervalued US Stocks According to Hedge Funds. Please visit 10 Most Undervalued US Stocks According to Hedge Funds if you’d like to see an extended list and how we came up with the list of Most Undervalued US Stocks According to Hedge Funds.
5. Citigroup Inc. (NYSE:C)
Forward Price to Earnings Ratio: 11.42
Number of Hedge Fund Holders: 115
Citigroup Inc. (NYSE:C) is one of the Most Undervalued US Stocks According to Hedge Funds. On March 18, Citigroup Inc. (NYSE:C) announced forming a 15 billion euros, roughly $17.48 billion private credit partnership with BlackRock’s HPS Investment Partners to support direct lending across Europe, the UK, and eventually the Middle East.
The report noted that, as per this partnership, Citigroup will source deal opportunities for borrowers in the region. The program aims to focus on sub-investment grade debt over an initial five-year term, which are riskier corporate loans that offer higher returns.
The deal is driven by growing demand from Citi’s corporate clients for customized private credit solutions. While Citi will source investment opportunities, HPS brings its lending expertise. Reuters noted that this partnership reflects a broader trend of banks teaming up with investment firms to capture a share of the booming, multi-trillion-dollar private credit market. Notably, earlier Citi struck a similar $25 billion deal with Apollo Global back in 2024.
Citigroup Inc. (NYSE:C) is a major global financial services holding company offering banking, credit, markets, wealth management, and advisory services to consumers, corporations, governments, and institutions. Headquartered in New York City, the company traces its roots back to 1812.
4. Salesforce, Inc. (NYSE:CRM)
Forward Price to Earnings Ratio: 13.16
Number of Hedge Fund Holders: 115
Salesforce, Inc. (NYSE:CRM) is one of the Most Undervalued US Stocks According to Hedge Funds. On May 18, Salesforce, Inc. (NYSE:CRM) was reiterated with an Underperform rating by analyst Tal Liani from Bank of America Securities. The analyst kept the price target of $160.
Tal Liani noted that while the Salesforce platform remains deeply entrenched with a strong enterprise foothold, he believes that the company is entering a structural reset as it navigates the shift toward AI-driven business models. The analyst highlighted this transition as a red flag due to three main issues.
Firstly, BofA noted that the company is adding fewer net new customers, suggesting slower growth. Secondly, the ability to upsell existing customers into higher-value products appears limited. Lastly, the analyst sees Salesforce’s AI monetization strategy as underwhelming.
That said, almost a month ago, on April 16, Truist Securities had reiterated a Buy rating on the stock with a price target of $280. The analyst noted that the discussion with customers and management indicated that LLM-based agentic coding tools are not expected to displace the Salesforce platform. The firm also noted that the overall flow of the company is seen as generally positive.
Overall, the Street has a positive opinion on CRM, with analysts’ 12-month average price target suggesting more than 39% upside from the current level.
Salesforce Inc. (NYSE:CRM) is a global enterprise software company that provides customer relationship management (CRM) and cloud-based business applications across sales, service, marketing, commerce, and data analytics. Its Customer 360 platform, powered by data tools and trusted AI, enables organizations to unify customer data and drive personalized engagement.
3. Bank of America Corporation (NYSE:BAC)
Forward Price to Earnings Ratio: 11.14
Number of Hedge Fund Holders: 118
Bank of America Corporation (NYSE:BAC) is one of the Most Undervalued US Stocks According to Hedge Funds. On May 8, Reuters reported that Bank of America Corporation (NYSE:BAC) has hired Richard Hardegree as Vice Chair of Mergers and Acquisitions.
Hardegree is a seasoned investment banker at UBS and brings over 30 years of M&A experience with a strong focus on the semiconductor sector. He is expected to join in August, will be based in Palo Alto, and report to BofA’s co-heads of global M&A.
The report noted that Hardegree’s track record shows that he has been advising on major tech deals such as Broadcom’s acquisition of VMware and SAP’s sale of Qualtrics to Silver Lake. Moreover, this new hiring reflects the bank’s broader strategy to expand its tech dealmaking footprint. The report noted that BofA had already poached four other veteran bankers from competitors earlier this year, signaling an aggressive strategy to gain market share.
This move comes at a time when global M&A activity has surged more than 32% year-over-year, with roughly $2 trillion in deals announced so far in 2026.
Bank of America Corporation (NYSE:BAC) is a leading global financial institution offering banking, lending, investing, wealth management, and corporate finance services to consumers and businesses. Headquartered in Charlotte, North Carolina, the company was founded in 1904 as the Bank of Italy in San Francisco by A. P. Giannini.
2. JPMorgan Chase & Co. (NYSE:JPM)
Forward Price to Earnings Ratio: 13.34
Number of Hedge Fund Holders: 131
JPMorgan Chase & Co. (NYSE:JPM) is one of the Most Undervalued US Stocks According to Hedge Funds. On May 13, Reuters reported that JPMorgan Chase & Co. (NYSE:JPM) has reorganized its investment banking division by appointing three new co-heads.
The co-heads include Dorothee Blessing, chief of investment banking coverage, Kevin Foley, global head of capital markets, and Jared Kaye, global co-head of financial institutions group. Moreover, the veteran banker Anu Aiyengar moves into a senior advisory role as global chair of investment banking and M&A, while Charles Bouckaert takes over as global head of M&A.
The report also noted that JPM has restructured how it organizes industry coverage by creating unified global heads for each sector. This replaces the previous split between coverage and M&A roles. This reorganization comes at a crucial time when global dealmaking is surging. Despite all the volatility, the M&A announcement has hit $2 trillion this month, reflecting a 33% year-over-year growth. According to Reuters, this is driven by favorable US regulatory policies, AI capital expenditure, and a strong IPO market.
JPMorgan Chase & Co. (NYSE:JPM) is a financial holding company involved in investment banking, consumer and small-business financial services, commercial banking, transaction processing, and asset management.
1. Micron Technology, Inc. (NASDAQ:MU)
Forward Price to Earnings Ratio: 12.43
Number of Hedge Fund Holders: 137
Micron Technology, Inc. (NASDAQ:MU) is one of the Most Undervalued US Stocks According to Hedge Funds. On May 18, Melius Research raised the firm’s price target on Micron Technology, Inc. (NASDAQ:MU) from $700 to $1,100 and maintained a Buy rating.
The firm noted that they remain optimistic regarding their long-term conviction in memory chips and AI semiconductors, despite the fact that Trump’s recent visit to China produced no concrete developments for the sector. Melius has upgraded the estimates across all buy-rated “bottleneck stocks,” including Micron, Sandisk, AMD, Intel, and Marvell.
However, the firm maintained a Hold rating for Qualcomm but updated the price target. The firm believes semiconductor companies will increasingly capture market capitalization and upside that currently resides in traditional software companies and non-semiconductor Magnificent 7 names over the long run.
Micron Technology Inc. (NASDAQ:MU) provides memory and storage solutions sold into client, cloud server, enterprise, graphics, networking, smartphone, mobile-device, automotive, industrial, and consumer markets, among others.
While we acknowledge the potential of MU 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 MU and that has 100x upside potential, check out our report about the cheapest AI stock.
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