In this article, we will discuss the 8 Undervalued Stocks with Huge Upside Potential.

On April 6, Fundstrat’s Tom Lee joined ‘Squawk Box’ on CNBC to discuss how the Iran war is affecting markets and the state of the US economy. Lee acknowledged that the war is lasting longer than he initially anticipated, forcing a delay in his predicted resolution. However, based on an analysis of the seven major war events in history, he noted that markets typically bottom within the first 10% of a war’s duration. He cited World War II as an example, where the market bottomed five months into a five-year conflict. Consequently, he believes that 90% to 95% of the market’s weakness is likely over, making the current risk-reward profile attractive for stocks.

Lee addressed the dilemma facing investors who sold into the March decline and noted that the market is only slightly lower than where they likely exited. He encouraged those in cash to look past the initial crisis toward the opportunities on the other side. He described the market as spring-loaded for an explosive recovery if a definitive peace agreement is reached, especially since wartime policy and the path of the conflict currently serve as bigger market drivers than the central bank. He noted that the economy is supported by defense spending and is performing well in sectors like oil. Despite risks, Lee maintained his year-end S&P 500 target of 7,700. He pointed to a recent positive jobs report as a factor that alleviated fears of a weak labor market or recession.

Our Methodology

We used screeners to identify stocks that are trading below a forward P/E of 15 and had an average upside potential of at least 30%. We then limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.

Note: All data was sourced on April 8. 

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 Undervalued Stocks with Huge Upside Potential

8. NXP Semiconductors (NASDAQ:NXPI)

Average Upside Potential: 33.25%

NXP Semiconductors (NASDAQ:NXPI) is one of the undervalued stocks with huge upside potential. On March 9, NXP Semiconductors announced the i.MX 93W applications processor, a new addition to the i.MX 93 family designed to accelerate physical AI deployment. This SoC is the industry’s first to integrate a dedicated AI NPU with secure tri-radio wireless connectivity in a single package. By combining these features, the i.MX 93W allows manufacturers to replace up to 60 discrete components, reducing design complexity, board area, and system-level costs for edge devices.

The processor features a dual-core Arm Cortex-A55 and an Arm Ethos NPU capable of up to 1.8 eTOPs, enabling AI agents to collaborate locally with low latency in environments like smart buildings and healthcare. Its integrated IW610 tri-radio supports Wi-Fi 6, Bluetooth Low Energy, and 802.15.4 protocols, including Matter and Thread.

Security is a core component of the i.MX 93W, which includes an EdgeLock Secure Enclave to meet regulatory standards like the European Cyber Resilience Act. This hardware root of trust supports critical functions such as secure boot and device attestation, further supported by NXP’s EdgeLock 2GO key management services. NXP Semiconductors (NASDAQ:NXPI) expects to begin sampling the i.MX 93W in H2 2026, targeting applications across industrial gateways, smart home hubs, and energy infrastructure monitors.

NXP Semiconductors (NASDAQ:NXPI) is a global semiconductor company that offers products like microcontrollers, application processors, wireless connectivity solutions, and security controllers for applications in various industries.

7. NRG Energy Inc. (NYSE:NRG)

Average Upside Potential: 33.28%

NRG Energy Inc. (NYSE:NRG) is one of the undervalued stocks with huge upside potential. On March 4, NRG Energy announced the appointment of Caroline Golin, Ph.D., as Chief Growth and Policy Officer. In this newly created role, Dr. Golin will oversee the strategic execution of business initiatives aimed at addressing rising energy demand, specifically focusing on data center opportunities and residential virtual power plant programs. Additionally, she is tasked with leading the company’s Government and Regulatory Affairs functions to ensure reliability and affordability for customers.

Dr. Golin joins NRG with more than 20 years of experience in market development and energy strategy. She most recently served as the Founder and CEO of Envision Energy Advisors, where she managed complex challenges in grid planning and procurement strategy. Previously, she was the Global Head of Energy Market Development and Innovation at Google, where she co-created the company’s initiative to operate entirely on carbon-free energy by 2030 and managed strategy for its digital infrastructure needs.

Dr. Golin, who holds a Master’s degree and a Ph.D. from the Georgia Institute of Technology, expressed her enthusiasm for joining the company at an industry inflection point. She noted that NRG Energy Inc. (NYSE:NRG) is well-positioned to leverage its market-leading platform to deliver innovative solutions and capture future growth as demand increases.

NRG Energy Inc. (NYSE:NRG) is a utilities company that specializes in energy and home services through its Texas, East, West/Other, Vivint Smart Home, and Corporate Activities segments. The company provides its services to a diverse range of customers, from data centers to wholesale.