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.
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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.
7. Zoom Communications, Inc. (NASDAQ:ZM)
Zoom Communications, Inc. (NASDAQ:ZM) ranks on our list of the 8 most undervalued cloud stocks to buy according to analysts.
As of March 20, 2026, analysts remain constructive toward Zoom Communications, Inc. (NASDAQ:ZM), with 56% of analysts covering the stock maintaining bullish ratings. The consensus price target of $97.50 implies an upside potential of 25.14%. The stock remains on analysts’ radar as it accelerates its AI strategy.
Revisiting Zoom Communications, Inc. (NASDAQ:ZM), Needham & Company reaffirmed a “Buy” rating on the stock with a price target of $100.00 on March 13, 2026. This indicates substantial potential for stock appreciation relative to its current trading level of $76.61.
The investment firm highlighted that investor concerns are predominantly focused on Zoom Communications, Inc. (NASDAQ:ZM)’s ability to capitalize on AI investments, although it contends that Zoom’s growth potential remains undervalued. Products like ZVA 3.0 and Custom AI Companion 3.0 were cited as major drivers, with the firm also adding that the current sell-off, which followed lower-than-anticipated FY 2027 free cash flow, offers investors an attractive entry point.
Meanwhile, on March 10, 2026, Zoom Communications, Inc. (NASDAQ:ZM) unveiled the expansion of its enterprise agentic AI platform, incorporating workflow orchestration across Zoom Workplace, Zoom Phone, and Zoom CX. The development supports the automation of tasks across different systems directly from chats, removing common inefficiencies experienced by companies.
Zoom Communications, Inc. (NASDAQ:ZM) is a cloud-based communications and collaboration platform operating worldwide, including the Americas, Asia Pacific, and EMEA, providing video, voice, and chat solutions for organizations. Its headquarters are in San Jose, California.
6. DocuSign, Inc. (NASDAQ:DOCU)
DocuSign, Inc. (NASDAQ:DOCU) earns a place on our list of the 8 most undervalued cloud stocks to buy according to analysts.
As of March 18, 2026, analysts have taken a cautious approach toward DocuSign, Inc. (NASDAQ:DOCU), with firms making adjustments to their price forecasts following strong quarterly results.
Amid industry challenges and declining valuations, the company’s Q4 results offered some reassurance; however, they did not significantly alter analyst perspectives.
RBC Capital Markets analysts reduced the firm’s price target for DocuSign, Inc. (NASDAQ:DOCU) from $70 to $55, while keeping a “Sector Perform” rating. It cited improvements in the dollar net retention rate and initial progress on the Intelligent Agreement Management (IAM) platform, although it remains cautious about enterprise adoption. The firm added that its price target reduction reflects multiple headwinds across its peers.
Similarly, on the same day, Morgan Stanley analyst Josh Baer lowered the price target on DocuSign, Inc. (NASDAQ:DOCU) to $69.00 from $90.00, maintaining a “Equal Weight” rating. The firm cited restricted margin expansion and a stagnant 102% dollar-based net retention rate as limiting factors for potential growth. While the company reported solid results that beat analyst expectations, the investment firm noted that the improvement was only a small margin.
DocuSign, Inc. (NASDAQ:DOCU) offers cloud-based electronic signature and agreement solutions that facilitate secure document workflows, automation, and transaction management. Established in 2003, it is based in San Francisco, California.
While we acknowledge the potential of DOCU 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 DOCU and that has 100x upside potential, check out our report about the cheapest AI stock.
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