In this article, we will take a look at the most undervalued tech giants to buy according to hedge funds.
These days, technology is a hot topic in every conversation as companies seize every opportunity to innovate and investors chase the right investments. While big names often grab headlines, some of the most profitable companies often remain under the radar.
According to a report by McKinsey & Company, titled “Economic conditions outlook, December 2025,” published on December 18, surveyed executives are ending 2025 with increased confidence in the macroeconomic environment and the company’s performance. The article discusses the latest McKinsey Global Survey, in which respondents indicated growing confidence in the overall outlook, as leaders focus on technology investments.
The publication advances by characterizing technology as “a growth opportunity,” particularly for big names. The author concluded that investment in AI and gen AI remains the “most reported high priority for business leaders to address.”
Keeping this in view, this article examines eight undervalued technology giants favored by hedge funds, highlighting that these companies are well-positioned for a potential rebound.
Photo by Adam Nowakowski on Unsplash
Our Methodology
For this article, we considered stocks in the Technology sector with market capitalizations exceeding $50 billion. After this initial screening, we further shortlisted stocks with a forward P/E between 8 and 22, a range that indicates a reasonable discount to the Nasdaq 100 Index. These stocks are then ranked by the number of hedge fund holdings, based on Insider Monkey’s database, as of Q3 2025.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
8. TE Connectivity plc (NYSE:TEL)
Number of Hedge Fund Holders: 60
Upside Potential as of December 26, 2025: 20.54%
Market Capitalization as of December 26, 2025: $68.404 billion
As of December 26, TE Connectivity plc (NYSE:TEL) has a ‘Buy’ or equivalent rating from 65% of the analysts covering the stock. With a median price target of $280, the stock has an upside potential of around 21%. On December 19, Truist lifted the price target on TEL to $240 from $239, while maintaining a ‘Hold’ rating on the stock. This reflects an upside potential of 3%.
Following the inclusion of 2027 forecasts, the firm updated price targets for the semiconductor and artificial intelligence sectors. Although challenges associated with securing the power needed to run AI infrastructure and sourcing the funds required remain, AI infrastructure semiconductor stocks still “remain cheap” relative to their growth, Truist noted. The firm sees “more upside pressure” to guidance for the group relative to the diversified analog semis entering into 2026. AI capital expenditure upside will continue over the next year, the analyst concluded.
Earlier on December 10, Jefferies reaffirmed its Buy rating on TE Connectivity plc (NYSE:TEL) with a $280 price target. According to the analyst, the firm’s 2026 Multi-Industrials sector positioning is based on three themes: 1. exposure to power and data centers; 2. margin expansion through internal productivity; and 3. a cyclical recovery after two years of subdued volumes.
TE Connectivity plc (NYSE:TEL) is an Ireland-based company specializing in connectivity and sensor solutions. Founded in 1941, the company operates through two segments: Transportation Solutions and Industrial Solutions.
7. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 63
Upside Potential as of December 26, 2025: 14.31%
Market Capitalization as of December 26, 2025: $188.717 billion
As of December 26, QUALCOMM Incorporated (NASDAQ:QCOM) has a ‘Buy’ or equivalent rating from half of the analysts covering the stock. With a median price target of $200, the stock has an upside potential of 14.28%. Among the analysts bullish on the stock is Fang Boon Foo, an analyst at DBS, who maintained a ‘Buy’ rating on the company on December 5 and a price target that mirrored the consensus estimate.
Later, on December 18, QUALCOMM Incorporated (NASDAQ:QCOM) announced the completion of its acquisition of Alphawave IP Group plc, a quarter ahead of the expected timeline. This acquisition is a testament to the company’s strategy of establishing a foothold in the data center market. CEO and co-founder of Alphawave Semi, Tony Pialis, will lead the company’s data center business.
“Alphawave Semi’s expertise in high-speed connectivity technologies complements our Qualcomm Oryon CPU and Hexagon NPU processors,” stated Cristiano Amon, President and CEO of QUALCOMM Incorporated (NASDAQ:QCOM). “The addition of Alphawave’s technologies will strengthen our platforms and optimize performance for next-generation AI data centers.”
The venture aims to create a leading player in AI compute and connectivity solutions across several fast-growing markets, particularly data center applications.
Separately, on December 16, C.J. Muse from Cantor Fitzgerald lifted the price target on QUALCOMM Incorporated (NASDAQ:QCOM) to $185 from $170 and maintained a ‘Neutral’ rating. The firm’s confidence in SOX (Philadelphia Semiconductor Index) to lead the market is driven by its outperformance versus S&P by approximately 30 points in CY25, The Fly reported.
QUALCOMM Incorporated (NASDAQ: QCOM), headquartered in California, is a digital telecommunications provider operating across three segments: Qualcomm CDMA Technologies, Qualcomm Technology Licensing, and Qualcomm Strategic Initiatives.
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