In this article, we will list the 5 Oversold Stocks to Buy Under $20. Please visit 7 Oversold Stocks to Buy Under $20 if you would like to see the extended list and the methodology behind it.
5. Tencent Music Entertainment Group (NYSE:TME)
Tencent Music Entertainment Group (NYSE:TME) is one of the best oversold stocks to buy under $20. On March 19, Tencent Music Entertainment Group (NYSE:TME) was downgraded to Equal Weight from Overweight by Morgan Stanley, with the firm bringing the price target on the stock down to $12.30 from $25. It stated that both the firm and the market considerably underestimated the competitive risk at the lower end from Soda Music, adding that the market has started to debate whether Tencent Music Entertainment Group’s (NYSE:TME) moat can work.
Tencent Music Entertainment Group (NYSE:TME) also received a rating update from Mizuho on March 18. The firm cut the price target on the stock to $23 from $28 while maintaining an Outperform rating on the shares. The rating update came after the company released its fiscal Q4 report, with Mizuho stating that it sees uncertainties for Tencent Music Entertainment Group (NYSE:TME) around competition and AI weighing on the shares. The firm further told investors in a research note that the company is facing a “dilemma between near-term operating metrics vs strategic execution”, and thus Mizuho cited execution uncertainties for the target cut.
Tencent Music Entertainment Group (NYSE:TME) is involved in the operation of online music entertainment platforms to provide services such as music streaming, live streaming, and online karaoke. The company’s product brands include QQ Music, Kugou Music, Kuwo Music, and WeSing.
4. Blue Owl Capital Inc. (NYSE:OWL)
Blue Owl Capital Inc. (NYSE:OWL) is one of the best oversold stocks to buy under $20. Blue Owl Capital Inc. (NYSE:OWL) received a rating update from BMO Capital on March 24. The firm cut the price target on the stock to $11 from $15, reaffirming an Outperform rating on the shares. The rating update came as part of a broader research note on Alternative Asset Manager names, with the firm stating that issues are piling up. Several factors are raising uncertainty around realizations, including BDC redemptions, credit issues at Asset-Based Finance markets, market volatility, and AI-driven disruption weighing on performance. It further told investors in the research note that credit spreads are also widening, while fraud allegations are raising questions around underwriting and downside protection.
In another development, TD Cowen cut the price target on Blue Owl Capital Inc. (NYSE:OWL) to $14 from $16, reaffirming a Buy rating on the shares. The firm stated that it held investor meetings with the company and cut its estimates after a number of new analyses suggesting that investors are effectively pricing in, at a minimum, complete extinction of the company’s roughly $35B (in NAV) evergreen complex.
Blue Owl Capital Inc. (NYSE:OWL) is an alternative asset management firm that offers investors access to asset management capital solutions through its Direct Lending and GP Capital Solutions products.
3. Snap Inc. (NYSE:SNAP)
Snap Inc. (NYSE:SNAP) is one of the best oversold stocks to buy under $20. Reuters reported on March 26 that Snapchat, owned by Snap Inc. (NYSE:SNAP), was hit with an EU investigation, with regulators warning that it does not appear to be taking enough steps to prevent the sale of illegal goods and child grooming. The probe is being conducted by the EU under the Digital Services Act, under which big online platforms are required to do more to deal with illegal or harmful content, or risk being fined as much as 6% of their global annual sales.
EU tech chief Henna Virkkunen said in a statement that Snapchat seems to have overlooked the fact that the Digital Services Act demands high safety standards for all users, ranging from grooming and exposure to illegal products to account settings that undermine minors’ safety. The European Commission is charged with the enforcement of the act, and stated that it suspects Snapchat does not have enough safeguards to shield children from being contacted by users who might be looking to exploit them for criminal activities, or sexually.
Snap Inc. (NYSE:SNAP) is a technology company that runs Snapchat as a visual messaging social application. Snapchat is the company’s core mobile application that employs augmented reality in its various “Lenses.”
2. SoFi Technologies, Inc. (NASDAQ:SOFI)
SoFi Technologies, Inc. (NASDAQ:SOFI) is one of the best oversold stocks to buy under $20. SoFi Technologies, Inc. (NASDAQ:SOFI) announced on March 26 the expansion of its Loan Platform Business (LPB), committing over $3.6 billion in personal loan delivery across three new partnerships. Management stated that the company closed an LPB transaction with a leading global bank for an anticipated loan delivery of over $1 billion, along with a separate LPB transaction with a financial services and insurance group for $600 million over 12 months.
In addition, SoFi Technologies, Inc. (NASDAQ:SOFI) also stated that it agreed on terms on a new partnership with a top-five global private asset management firm, which is expected to deliver up to $2 billion over a two-year period.
Anthony Noto, CEO of SoFi Technologies, Inc. (NASDAQ:SOFI), stated that the addition of three new partners to the company’s growing network highlights the value of its Loan Platform Business to asset managers, institutional investors, and partners more broadly.
SoFi Technologies, Inc. (NASDAQ:SOFI) is a financial service platform that provides student loan refinancing options to the private student loan market. The company’s operations are divided into the following segments: Lending, Technology Platform, and Financial Services.
1. Unity Software Inc. (NYSE:U)
Unity Software Inc. (NYSE:U) is one of the best oversold stocks to buy under $20. Morgan Stanley lifted the price target on Unity Software Inc. (NYSE:U) to $32 from $30 on March 27, reiterating an Overweight rating on the shares. The rating update came after the company pre-reported “strong” 1Q results, including Vector growing 78% year-over-year and 15% quarter-over-quarter. The firm also cited Unity Software Inc.’s (NYSE:U) plans to exit the ironSource Ad Network, which Morgan Stanley expects to increase growth, margins, and EBITDA.
Unity Software Inc. (NYSE:U) announced preliminary revenue and adjusted EBITDA for the first quarter of 2026 above guidance on March 26, adding that it expects to report revenue in the range of $505 million to $508 million, compared to guidance of $480 million to $490 million. It also anticipated adjusted EBITDA of $130 million to $135 million, compared to guidance of $105 million to $110 million, representing year-over-year growth of 58%. Management attributed the outperformance to Unity Vector, which is anticipated to rise sequentially in fiscal Q1 2026, along with better-than-expected performance in Create.
Unity Software Inc. (NYSE:U) is involved in developing video gaming software and provides software solutions to run, create, and monetize interactive, real-time two-dimensional and three-dimensional content for tablets, consoles, mobile phones, and augmented and virtual reality devices.
While we acknowledge the potential of U 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 U and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: 15 Stocks That Will Make You Rich in 10 Years AND 12 Best Stocks That Will Always Grow.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
Hedge Fund Resource Center