In this piece, we discuss the 8 Most Undervalued Cloud Stocks to Buy According to Analysts.
Last month, Reuters reported that Wall Street is navigating disruption amid concerns about artificial intelligence. This led to a widespread selloff across software equities, which quickly spread to several sectors perceived as susceptible to AI-driven disruption. Investor sentiment worsened after a series of AI model enhancements and product launches, with analysts observing a prevailing “sell first, think later” mentality in the markets.
Surprisingly, the S&P 500 Software & Services index has experienced a decline of over $2 trillion in value since its peak in October, with nearly half of these losses occurring within just two weeks due to expectations that emerging AI technologies may disrupt conventional subscription and enterprise software frameworks.
Separately, on February 9, Reuters reported that the software industry’s decline was a significant reversal from its post-pandemic robustness, with the industry lagging the broader S&P 500 by roughly 24 percentage points over three months (as of the time of original reporting), approaching historically unusual levels. The selloff, partially propelled by emerging AI capabilities, has prompted essential inquiries into the sustainability of software business models and earnings growth.
Despite volatility and significant declines among prominent companies, such dislocations have historically aligned with periods that either precede additional downturns or offer attractive entry points for contrarian investors.
With this background in mind, we discuss below the most undervalued cloud stocks to buy according to analysts.
Methodology
To curate our list of the 8 most undervalued cloud stocks, we relied on a screener to shortlist companies with significant cloud exposure. Next, we filtered out stocks trading at a price-to-earnings multiple under 15x and a market capitalization of over $2 billion. Finally, we selected stocks with over 20% upside potential. These stocks are popular among analysts and are ranked based on their upside potential. Importantly, we limited our selection to companies that have recently reported noteworthy developments likely to impact investor sentiment.
“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. Adobe Inc. (NASDAQ:ADBE)
Adobe Inc. (NASDAQ:ADBE) earns a place in our list of the 8 most undervalued cloud stocks to buy according to analysts.
As of March 20, 2026, Adobe Inc. (NASDAQ:ADBE) boasts a consensus price target of $310.00, implying a potential upside of 24.21%. With 50% of analysts covering the stock maintaining bullish ratings, overall analyst sentiment remains constructive.
However, on March 19, 2026, investor sentiment turned slightly cautious toward Adobe after the UK’s Competition and Markets Authority (CMA) initiated an inquiry into the company’s early cancellation costs, Reuters reported. This inquiry was initiated to determine whether the company’s practices related to programs such as Photoshop, Illustrator, and Premiere were deceptive or unfair. Following Adobe Inc.’s (NASDAQ:ADBE) recent $150 million U.S. settlement over similar allegations, the CMA is assessing whether customers received clear and timely information about these costs. Adobe states that it has not only made the company’s cancellation procedures clearer but has also simplified them in recent years.
The regulatory update was preceded by Citi’s note on March 16, 2026, where the firm maintained a ‘’Neutral” rating on Adobe Inc. (NASDAQ:ADBE), while lowering the price target to $278 from $315. This follows the company’s fiscal Q1 results, which exceeded expectations and featured an in-line Q2 outlook. The analyst identified uncertainty around the CEO succession amid a critical period in Adobe’s AI strategy as a significant factor driving skepticism.
Adobe Inc. (NASDAQ:ADBE) offers digital media, marketing, and publishing solutions that facilitate content creation, customer experience management, and the provision of legacy services for global businesses. The company was founded by Charles M. Geschke and John E. Warnock.
