We recently published a list of 12 Most Oversold Large Cap Stocks to Invest in Now. In this article, we are going to take a look at where Cognizant Technology Solutions Corporation (NASDAQ:CTSH) stands against other most oversold large cap stocks to invest in now.
Impact of Tariff Uncertainty on Wall Street and the Future of US Stocks
Wall Street is being impacted by the uncertainty surrounding the tariff news. The broader has dropped a lot since Trump took office on January 20, and investors are mostly worried about tariffs because they think they could hurt economic growth and cause inflation. Investors think trade policies can reduce consumer confidence and restrict businesses’ ability to invest capital, while Trump believes tariffs can boost national revenue, promote broad-based growth, and be used as a negotiation weapon with other nations.
According to Franklin Templeton, the Magnificent Seven’s supremacy in AI has allowed US stocks to generate significant returns over the last few years, with the broader market frequently hitting all-time highs. The outlook for the market as a whole is favorable, notwithstanding high valuations. Sales growth has been accelerating, innovation and investment are still happening at a rapid pace, and this year’s earnings are predicted to increase by double digits. Additionally, the administration of the US economy is more business-friendly. However, there are concerns, primarily associated with US trade policy and the anticipated effects of tariffs on important industries, such as technology.
Franklin Templeton thinks that despite these risks, investor confidence in US stocks should continue to be high. The new administration’s policy reforms are anticipated to finally produce long-term benefits for the larger US economy, notwithstanding the possibility of increased dangers.
Franklin Templeton also stated that although the Mag 7 stocks are positioned for long-term success, market leadership is anticipated to expand as and when innovation accelerates. According to the investment firm, active management is crucial. The transition from AI platforms to infrastructure is still in progress. Consequently, it is anticipated that the success of investments will depend on the ability to select the appropriate companies at the right time—those that have the technology, strategy, and flexibility to continue and sustain long-term growth.
Thanks to innovation and investment, US stocks—mostly large-cap stocks—have been doing well. Notably, the Dow index has increased by more than 4.5% in the last six months. The investment business sees expanding chances beyond such market leaders, even though the Mag 7 stocks still sustain the market momentum. The competitive landscape is still dynamic and has been generating new development sectors as a result of the ongoing AI-driven cycle.
Our Methodology
For our methodology, we screened for stocks with a market capitalization exceeding $10 billion and a relative strength index (RSI) below 40. We then ranked these stocks based on the lowest RSI as of March 23, 2025. An RSI below 40 suggests that the stock is oversold.
At Insider Monkey, we are obsessed with hedge funds. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A data analyst using cutting-edge analytics to accurately interpret complex sets of data.
Cognizant Technology Solutions Corporation (NASDAQ:CTSH)
Relative Strength Index: 28.75
Cognizant Technology Solutions Corporation (NASDAQ:CTSH) stands tenth among the 12 most oversold large cap stocks to invest in now. It is a global IT services and consulting firm that helps businesses navigate digital transformation through AI, cloud computing, digital engineering, and business process outsourcing. What sets the company apart is its deep industry expertise and strong global presence, which allows it to offer tailored solutions and round-the-clock service to multinational clients while leveraging local market insights.
Cognizant Technology Solutions Corporation (NASDAQ:CTSH)’s Q4 2024 earnings call on February 5, 2025, showcased strong financial performance, with EPS of $1.21 surpassing expectations of $1.12. Its revenue grew 6.7% year-over-year in constant currency, reaching $5.1 billion, which was driven by organic growth and strategic acquisitions like Belcan. Notably, the Health Sciences segment thrived due to the continued strength of the TriZetto platform, while Financial Services saw increased demand for cloud, data, and modernization services.
Cognizant Technology Solutions Corporation (NASDAQ:CTSH) also demonstrated significant momentum in large deals, signing 10 in Q4 alone, up from seven the previous year, bringing the 2024 total to 29—nearly doubling the 17 signed in 2023. These deals spanned key service areas such as digital engineering, cloud solutions, and financial services. Improved cost efficiency was another highlight, as the company’s adjusted operating margin expanded to 15.7%, thanks in part to the completion of the NextGen cost program. This margin growth has enabled the company to reinvest in AI and acquisitions.
Cognizant Technology Solutions Corporation (NASDAQ:CTSH) is also making strategic moves in AI, launching industry-specific solutions like Stores 360 for retail and a Toyota partnership in automotive. Additionally, the company is strengthening its partnerships with major players like McDonald’s and Gilead Sciences to drive digital transformation. To enhance operational efficiency and expand its talent base, the business is establishing Global Capability Centers (GCCs) in India, which further solidifies its position in the digital services space.
Overall, CTSH ranks 10th on our list of most oversold large cap stocks to invest in now. While we acknowledge the potential CTSH, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CTSH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
Hedge Fund Resource Center