Top 10 Undervalued Tech Stocks

Published April 19, 2022 at 9:23 am EDT Updated September 7, 2026 at 11:30 am EDT

In this article, we discuss the top 10 undervalued tech stocks.

The technology sector represents around 28% of the S&P 500, more than the combined share of consumer discretionary and healthcare sectors. Over the last 20 years, much of the gains posted by the economy are owed to tech stocks that have revolutionized everyday life for billions around the globe. Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL), and Tesla, Inc. (NASDAQ:TSLA) — all the blue-chip stocks in the trillion-dollar fraternity — happen to be technology stocks.

But come 2022, the volatile market situation has put a dent in all sectors of the economy. The tech-heavy Nasdaq composite has dropped 12.28% year-to-date, while the Dow Jones Industrial Average and the S&P 500 have lost 5.71% and 6.58% in year-to-date respectively. The jittery sentiment prevalent in the market can be owed to a variety of factors. The Fed has raised interest rates and seems set to continue throughout the year. Recently, Fed Governor Lael Brainard sent markets into a sell-off frenzy by saying that the central bank is committed to fighting inflation by hiking interest rates. It also plans to reduce its balance sheet at a ‘rapid pace’. These measures by the Fed come at the same time that oil prices are touching record highs as the global market reels from the Russian invasion of Ukraine and the subsequent sanctions imposed on the country.

Photo by Adam Nowakowski on Unsplash

Amidst all this volatility, investors need to pick up stocks that possess growth potential and are trading at less than their intrinsic market value. This would safeguard their portfolios from the risk that comes inherent in the current climate. Even if the tech sector, or the larger economy, is undergoing a nervous sell-off, choosing undervalued tech stocks puts one in a position to be able to achieve higher gains as soon as the market takes off.

Let’s now take a look at the top undervalued tech stocks.

Our Methodology

We examined the tech industry and picked stocks with a P/E (price to earnings) ratio of less than 20. We also looked for growth potential, analysts’ ratings, and the hedge fund sentiment around each stock, which has been derived from Insider Monkey’s database of 900+ elite hedge funds.

10. STMicroelectronics N.V. (NYSE:STM)

PE Ratio: 18.17

STMicroelectronics N.V. starts off our list of 10 undervalued tech stocks. The Swiss company deals in the provision of semiconductor integrated circuits and discrete devices to industries including telecommunications and consumer electronics.

Analyst Adithya Metuku of research firm Credit Suisse on February 17 maintained an ‘Outperform’ rating on STMicroelectronics N.V. shares and increased the price target to €65 from €60. The firm recently introduced the third generation of MEMS sensors, enabling the next upgrade in features and performance for products such as smartphones and others in healthcare and retail. In March, STMicroelectronics N.V. released radiation-hardened ICs (integrated circuits) that would feature in low-cost satellites during space missions.

STMicroelectronics N.V. reported its fourth quarter earnings on January 27, and posted an EPS of $0.82, which was above estimates by $0.13. Quarterly revenue stood at $3.56 billion, outperforming analysts’ estimates by $91.40 million and signaling a bump of 9.92% year-0n-year.

Of the hedge funds tracked by Insider Monkey, 15 were long STMicroelectronics N.V. in Q4 2021 with combined positions worth $264.3 million. This shows an upward trend from the third quarter where 11 hedge funds held $49 million worth of stakes in the company. Renaissance Technologies was the top shareholder of STMicroelectronics N.V. in the fourth quarter with 1.53 million shares valued at $75.78 million.

In addition to Amazon.com, Inc., Microsoft Corporation and Alphabet Inc., STMicroelectronics N.V. is a tech stock on the radar of institutional investors.

9. A10 Networks, Inc. (NYSE:ATEN)

PE Ratio: 11.65

A10 Networks, Inc. (NYSE:ATEN) is a California-based firm which deals in the provision of cybersecurity, cloud storage and enterprise solutions. Ever since the Russian invasion of Ukraine unfolded, cybersecurity stocks have been in the limelight as critical government infrastructure on both sides of the conflict face a heightened risk of cyber attacks. As of April 5, shares of A10 Networks, Inc. have gained 42.12% in the last 12 months, and 3.22% in the last 6 months.

Investors were seen piling into A10 Networks, Inc. in the fourth quarter where 20 hedge funds were long on the company shares, with combined holdings worth $155.5 million. In contrast, 14 hedge funds held positions worth $188.8 million in the cybersecurity firm a quarter ago. Renaissance Technologies of billionaire Jim Simons was the top shareholder of A10 Networks, Inc. in the fourth quarter, with 2.95 million shares worth $48.9 million.

In October last year, BWS Financial analyst Hamed Khorsand raised the firm’s price target on A10 Networks, Inc. to $20 from $17 and maintained a Buy rating on the company shares. The analyst sees the firm benefiting from the rise in cybersecurity spending by service providers and enterprises.

On February 10, A10 Networks, Inc. declared a $0.05 per share quarterly dividend, which was in-line with previous. As of April 5, the firm pays a dividend yield of 1.45%. It reported earnings per share of $0.20 for the fourth quarter, which outperformed estimates by $0.01. Quarterly revenue of $70.67 million was also above estimates by $1.83 million.

8. Nokia Oyj (NYSE:NOK)

PE Ratio: 17.44

Nokia Oyj provides mobile network infrastructure services around the globe. Once a global leader in cellular phones, the firm failed to keep up in the smartphone era but has now reemerged as a critical player in the 5G space.

The Finnish company recently signed or expanded 5G infrastructure agreements with service providers such as T-Mobile in Poland, Chunghwa Telecom in Taiwan and IOH in Indonesia. On March 17, Jefferies analyst Janardan Menon initiated coverage of Nokia Oyj with a ‘Buy’ rating and €6 price target. He sees telecom equipment makers having a strong year on the back of increased 5G rollouts in Europe and elevated C-band deployments in the United States. The analyst sees Nokia benefiting from an acceleration in sales and margin expansion.

In the fourth quarter, Nokia Oyj posted earnings per share of $0.15, exceeding analysts’ estimates by $0.02. The revenue for Q4 stood at $7.33 billion, which also outperformed consensus estimates by $54.89 million.

Investors are keen on Nokia Oyj given its upward trajectory as a dominant name in the rollout of 5G technology across the world. 26 hedge funds were bullish on the company shares in the fourth quarter, in contrast to 22 hedge funds in the preceding quarter. The largest shareholder in Nokia Oyj during the fourth quarter was Arrowstreet Capital, which held 37.34 million shares valued at $232.3 million.

7. Hewlett Packard Enterprise Company (NYSE:HPE)

PE Ratio: 5.73

Hewlett Packard Enterprise Company is a Texas-based information technology firm which deals in the provision of services related to data, cloud storage, networking and servers to businesses around the world. It was formed after the Hewlett Packard Company was split into two businesses in 2015, forming Hewlett Packard Enterprise Company and HP Inc. (NYSE:HPQ) which retained the firm’s PC and printing business.

Bernstein analyst Toni Sacconaghi in early March upgraded Hewlett Packard Enterprise Company to ‘Outperform’ from ‘Market Perform’ and set a $20 price target. The analyst upgraded his valuation on the basis of strong enterprise demand, upside potential to earnings and free cash flow estimates, and the stock’s “increasingly attractive valuation”. In December, Stifel analyst Matthew Sheerin named Hewlett Packard Enterprise Company among his top 2022 picks for the tech supply chain sector, noting that demand signals for the sector remain quite strong for the year.

Reporting its fourth quarter earnings on March 1, Hewlett Packard Enterprise Company disclosed earnings per share of $0.53, which was above estimates by $0.07.

As of the fourth quarter, 35 hedge funds were holding stakes in Hewlett Packard Enterprise Company with a combined value of $1.14 billion. This shows an upward trend from the preceding quarter where 33 hedge funds held $1 billion worth of positions in the company. Pzena Investment Management was the top shareholder of Hewlett Packard Enterprise Company in Q4 2021, with 42.9 million shares valued at $677 million.

6. Vontier Corporation (NYSE:VNT)

PE Ratio: 10.37

Vontier Corporation provides products and services to the mobility infrastructure industry around the globe, which includes equipment such as fueling equipment, environmental sensors and software solutions for traffic light controls, as well as point-of-sale and payment systems.

On March 23, Argus analyst Kristina Ruggeri reiterated a ‘Buy’ rating on Vontier Corporation shares, noting that current price levels offer investors a favorable entry point, and also raised her 2022 adjusted EPS estimate for the firm. She has a $30 price target on Vontier shares, down from $40. Citi analyst Andrew Kaplowitz in February also maintained a ‘Buy’ rating on the company shares, and lowered the price target to $34 from $39. The company reported strong execution and upside to its 2022 growth outlook, and according to the analyst, its current valuation presents investors a good opportunity as the firm maintains a strong operational focus and deploys capital over time.

In February, Vontier Corporation announced a $250 million accelerated share repurchase agreement with Citibank. Vontier will acquire these shares as part of its $500 million share repurchase program which was announced in May 2021. It posted an EPS of $0.83 in the fourth quarter, beating estimates by $0.03.

Hedge fund sentiment was up on Vontier Corporation in the fourth quarter, where 37 hedge funds were holding positions in the firm. In comparison, 31 hedge funds held stakes in the firm a quarter ago. Royce & Associates held a $98.5 million stake in Vontier Corporation consisting of 3.2 million shares during the fourth quarter, making it the top shareholder of the firm.

Miller Value Partners, an investment firm, talked about Vontier Corporation in its Q1 2021 investor letter. The fund said:

“We also purchased Vontier, a spin-out from Fortive, which itself was a spinout from Danaher. Danaher’s unique approach to managing its business and acquiring companies created massive value over the years. Fortive pursued the same path. Vontier uses the same business and acquisition systems and offers similar potential. Vontier’s main businesses are gas station software and hardware and auto repair tooling. The market doesn’t value it similarly to the other two companies due to near-term business headwinds from passing a regulatory-led demand surge for its equipment and concerns about electric vehicle disruption. Management has already made some smart investments in the space and we believe it will deploy the same rational capital allocation policy that drove so much value at its predecessors.”

Alongside big names such as Amazon.com, Inc., Microsoft Corporation and Alphabet Inc., Vontier Corporation is an attractive tech stock to buy.

5. TE Connectivity Ltd. (NYSE:TEL)

Number of Hedge Fund Holders: 41

PE Ratio: 17.04

TE Connectivity Ltd. (NYSE:TEL) is up next on our list of top undervalued tech stocks. It provides connectivity and sensor solutions which are used towards the electrification of automobiles, trucks, trains and other machinery.

On January 20, JPMorgan analyst Samik Chatterjee maintained an ‘Overweight’ rating on TE Connectivity Ltd. stock, and increased the price target to $176 from $170, whilst noting that industrial technology companies are set for positive earnings and future outlook in the upcoming earnings season.

At the end of the fourth quarter, TE Connectivity Ltd. reported earnings per share of $1.76, surpassing estimates by $0.14. It posted revenue of $3.82 billion for the fourth quarter, also exceeding analysts’ forecasts by $81.40 million and increasing 8.40% year-on-year.

41 hedge funds out of the 924 tracked by Insider Monkey were bullish on TE Connectivity Ltd. during the fourth quarter, with aggregate positions worth $2.48 billion. The same number of hedge funds held stakes in the firm a quarter ago as well. Its largest shareholder during Q4 2021 was Harris Associates, which held 8.8 million shares valued at $1.42 billion.

ClearBridge Investments, an investment firm, talked about many stocks in its Q4 2021 investor letter, and TE Connectivity Ltd. was one of them. The fund said:

“We are encouraged by the resilience of the companies we hold across the portfolio, with particular strength during the quarter among our secular and structural growth holdings. Switzerland-based TE Connectivity, a leading global manufacturer of engineered components, continues to be a major beneficiary and enabler of the accelerating transition to vehicle electrification, including hybrid and battery electric.”

4. Lam Research Corporation (NASDAQ:LRCX)

Number of Hedge Fund Holders: 62

PE Ratio: 15.87

Lam Research Corporation (NASDAQ:LRCX) provides semiconductor processing equipment used in the fabrication of integrated circuits. The firm is well-positioned to enjoy an upward trajectory as companies around the world pour billions into enhancing semiconductor manufacturing output. Its clients include Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), the world’s largest semiconductor foundry, among others.

On March 18, analyst Atif Malik of research firm Citi added Lam Research Corporation to the firm’s US Focus List and kept a ‘Buy’ rating on the company’s shares with a $750 price target. He sees the firm boasting outsized memory sales exposure in comparison to its US peers and sees a good entry point given shares are down 28% year-to-date. Berenberg analyst Tammy Qiu in January reiterated a ‘Buy’ rating on Lam Research Corporation and noted the chip shortage will gradually resolve by end of 2022, and spending in the sector will remain high in the coming years.

Reporting its fourth quarter earnings on January 26, Lam Research Corporation posted an EPS of $8.53, which exceeded analysts’ expectations by $0.02. $4.23 billion in quarterly revenue was up 22.29% year-on-year, but fell below analysts’ forecasts by $188 million.

62 hedge funds were bullish on Lam Research Corporation in the fourth quarter, as compared to 47 in the preceding quarter. Billionaire Ken Fisher’s Fisher Asset Management was the top shareholder of Lam Research Corporation in the fourth quarter, with 1.8 million shares valued at $1.29 billion.

3. Verizon Communications Inc. (NYSE:VZ)

Number of Hedge Fund Holders: 63

PE Ratio: 9.88

Verizon Communications Inc. (NYSE:VZ) is a US-based company which offers a range of wireless communication services.

On January 26, Deutsche Bank analyst Bryan Kraft raised the firm’s price target on Verizon Communications Inc. to $59 from $57, and maintained a ‘Hold’ rating on the shares, noting that he sees about 8% upside in the stock over the next 12 months, and has increased the price target owing to higher free cash flow estimates for the year. In February, Verizon Communications Inc. partnered with carmaker Audi to bring 5G connectivity to its US automobile lineup. In its Investor Day presentation in March, Verizon announced that it estimates a $120 billion sales opportunity from 5G sales over the next 5 years.

63 out of 924 elite hedge funds tracked by Insider Monkey held stakes worth $10.8 billion in Verizon Communications Inc. during the fourth quarter. This shows growing investor confidence from the previous quarter, where 57 hedge funds reported bullish bets on the company shares. Warren Buffett’s Berkshire Hathaway was the top shareholder of Verizon Communications Inc. in the fourth quarter, with more than 158 million shares valued at $8.25 billion.

For the fourth quarter, Verizon Communications Inc. reported an EPS of $1.31, outperforming estimates by $0.03. Revenue of $34.07 billion was also above analysts’ forecasts by $30.57 million.

Investment firm Miller/Howard Investments talked about Verizon Communications Inc. in its Q1 2021 investor letter, stating:

“We sold Verizon (VZ) based on concerns over how much they might spend in ongoing spectrum auctions. Management may legitimately view spending billions of dollars to expand their spectrum holdings as necessary, but we believe the payoff will be slow and will make it challenging to grow the dividend at a good pace.”

2. QUALCOMM Incorporated (NASDAQ:QCOM)

Number of Hedge Fund Holders: 75

PE Ratio: 16.81

QUALCOMM Incorporated (NASDAQ:QCOM) provides critical technology to the wireless communication industry around the world. It develops the popular Snapdragon chipsets used by a range of prominent smartphone-makers, and its chips are used in autonomous vehicles, and IoT (internet of things) capabilities as well.

Canaccord analyst T. Michael Walkley in February kept a ‘Buy’ rating on QUALCOMM, Incorporated shares, and raised the price target to $250 from $225. The analyst sees the firm well-positioned to benefit from the increased adoption of smartphones with 5G capability, as well as growing demand in the automotive and Internet of Things (IoT) segments. On April 4, QUALCOMM Incorporated announced the acquisition of Arriver from SSW Partners, which will allow the firm to enhance its offerings for the autonomous vehicle industry with Advanced Driver Assistance System solutions.

In the fourth quarter, QUALCOMM Incorporated reported earnings per share of $3.23, which was above analysts’ estimates by $0.23. Quarterly revenue stood at $10.70 billion, above consensus estimates by $262.71 million and showing an increase of 30.04% year-on-year.

Out of all the hedge funds tracked by Insider Monkey, 75 hedge funds held stakes in QUALCOMM Incorporated during the fourth quarter, as opposed to 70 in the preceding quarter. Alkeon Capital Management was the leading shareholder of the firm in Q4 2021, with 5.3 million shares worth $970 million.

1. Micron Technology (NASDAQ:MU)

Number of Hedge Fund Holders: 83

PE Ratio: 9.51

Micron Technology (NASDAQ:MU) is a technology firm which specializes in memory and storage products used by a range of industries such as computing, automotive and consumer electronics. With the increased adaption of smartphones with 5G capability, Micron Technology is expected to benefit as these devices use considerably more memory and storage components in comparison to 4G handsets.

For the fourth quarter, Micron Technology, Inc. posted an EPS of $2.14, which beat estimates by $0.16. The quarterly revenue of $7.79 billion was above analysts’ forecasts by $241.85 million, and showed an increase of 24.86% year-on-year.

On March 30, Mizuho analyst Vijay Rakesh maintained a ‘Buy’ rating on Micron Technology, Inc. stock, and raised the price target to $113 from $110. He sees the firm well-positioned for the year, with strong quarterly growth in storage and computing, and longer-term tailwinds from product mix and content increases.

Out of the 924 elite hedge funds tracked by Insider Monkey in the fourth quarter of 2021, 83 were long Micron Technology, Inc., as compared to 63 in the preceding quarter which shows growing investor confidence in the firm.

Investment firm Hazelton Capital Partners mentioned Micron Technology, Inc. in its Q3 2021 investor letter. Here’s what the fund said:

“It’s hard to explain how shares of Micron Technology, manufacture of DRAM and NAND semiconductor chips, can fall during a global chip shortage. In most industries, focusing on demand can give you a clear insight into what lays ahead for a company. Today, the memory and storage chip industry is no different. However, in the past, companies focused on market share led to the reckless build out of chip fabrication plants (FABs), oversupply, falling average selling prices (ASPs) of memory and storage chips, lower margins, and declining cash flows. As the industry consolidated – there are now just 3 major producers of DRAM and 5 on the NAND side – rational behavior among the key players began to take hold as competitors began focusing more on R&D. Currently, chip pricing remains cyclical although less so than in the past and that cyclicality has a long-term upward bias. The ongoing transition to newer and more robust platforms (3D 176-layer NAND & 1-Alpha node DRAM) has provided the memory and storage chip industry with improved supply capacity under its current manufacturing footprint, ultimately pressuring ASPs. Over the past three years, as most of the large platform conversions have already taken place, being able to add more bits per wafer has reached a saturation point. With no major FAB build outs planned in the near-term by competitors Samsung or SK Hynix, constrained supply and flattening cost curves should lead to durable and upward sloping ASPs once the recent volatility from the chip shortage subsides.

Currently Micron Technology trades at just 8x 2022 estimate earnings. MU is expecting growth in both DRAM and NAND not just from the supply of more chips to data centers, artificial intelligence, the auto sector, and mobile devices, but also from greater demand for gigabyte capacity per unit within those segments. With a healthy balance sheet, improving return on invested capital, and expanding cash flows, not only should Micron benefit from improving future earnings but its multiple should also reflect the transition to a flattening cost curve.”

You can also take a look at Top 10 Logistics Companies In The World and 10 Best Communication Equipment Stocks To Buy.

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This article is originally published at Insider Monkey.

NYSE:HPE Headline NYSE:NOK NYSE:STM NYSE:VNT NYSE:ATEN Yahoo Finance Daily Newsletter 10 Best Oil Stocks To Buy Now A10 Networks Inc. (NYSE: ATEN)Top 10 Undervalued Tech Stocks Vontier Corporation (NYSE: VNT)10 Best Healthcare Dividend Stocks STMicroelectronics N.V. (NYSE: STM)10 Best Stocks To Buy and Hold For 5 Years Hewlett Packard Enterprise Company (NYSE: HPE)Show more...Show less

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