3 Cheap Tech Stocks That Are Screaming Buys in January

IBM - IBM faced declining revenue and profits for years, with its core IT software and services business shrinking and struggling to compete with cloud-based rivals [1] - Under CEO Arvind Krishna, IBM spun off its slow-growth managed IT infrastructure services business as Kyndryl and expanded Red Hat's presence in hybrid cloud and AI markets [2] - From 2021 to 2023, IBM's revenue grew at a CAGR of 4%, with EPS rising at a CAGR of 13% [3] - Analysts expect IBM's revenue and EPS to grow at a CAGR of 3% and 5%, respectively, from 2023 to 2026 [3] - IBM's stock is valued at 21 times forward earnings and offers a forward dividend yield of 3% [4] AT&T - AT&T streamlined its business by spinning off DirecTV, Time Warner, and other media assets in 2021 and 2022 [5] - The company focused on expanding its core 5G and fiber businesses, ensuring cash flow for dividends and debt reduction [5] - In 2023, AT&T generated $16.8 billion in free cash flow, with net adds for postpaid phone and fiber businesses growing by 1.7 million and 1.1 million, respectively [6] - Analysts expect AT&T's revenue and EPS to grow at a CAGR of 1% and 5%, respectively, from 2023 to 2026 [6] - AT&T offers a forward dividend yield of 5% and is seen as a safe haven in an unpredictable market [6] HP - HP experienced a slowdown from fiscal 2022 to 2024 due to reduced demand for consumer PCs and printers post-pandemic and macro headwinds affecting commercial sales [7] - The company cut costs and bought back shares, but EPS still dropped 14% in fiscal 2023 [8] - HP is focusing on workforce reduction, streamlining its PC portfolio, launching subscription services, and targeting higher-growth markets like hybrid work, gaming, and 3D printing [8] - Analysts expect HP's revenue and EPS to grow at a CAGR of 2% and 9%, respectively, from fiscal 2024 to 2027 [9] - HP's stock is valued at 10 times this year's earnings and offers a forward dividend yield of 2.8% [9] General Observations - IBM, AT&T, and HP are undervalued tech stocks with attractive dividend yields, making them appealing during market downturns [10] - These companies are seen as stable investments compared to high-growth tech stocks, especially as interest rates decline [11]