10 Most Undervalued Tech Stocks to Buy in 2026

Core Viewpoint - The article discusses the 10 most undervalued tech stocks to buy in 2026, emphasizing the ongoing health of the AI trade and the significant capital expenditure by major tech companies in infrastructure development [2][3][4]. Industry Insights - Doug Clinton from Intelligent Alpha indicates that the AI trade remains robust, with recent market pullbacks viewed as necessary for the technology sector [2]. - The "Mag 7" tech companies are projected to increase capital expenditures by approximately 35% in 2026, with potential growth reaching 50% [3]. - High valuations in technology stocks are attributed to reinvestment of free cash flow into infrastructure, although there are still undervalued opportunities in the sector [3]. Methodology for Stock Selection - The list of undervalued tech stocks was created using the Finviz Stock Screener, Seeking Alpha, and Insider Monkey's hedge fund database, focusing on stocks with a forward P/E ratio under 15 [6]. - The methodology emphasizes the importance of hedge fund interest, as imitating top hedge fund picks has historically led to market outperformance [7]. Company-Specific Highlights - NICE Ltd. (NASDAQ:NICE): - Forward P/E Ratio: 9.46, with 22 hedge fund holders [8]. - Analysts maintain a positive outlook despite expected lower gross margins due to strategic investments in cloud and AI [9]. - The company anticipates a 200 basis point reduction in margins but expects long-term benefits from its investments [10]. - TaskUs, Inc. (NASDAQ:TASK): - Forward P/E Ratio: 7.33, also with 22 hedge fund holders [11]. - Analysts project over 42% upside potential, but recent challenges have led to a hold rating [12]. - Despite near-term difficulties, the company is expected to return to growth with modest margin improvements by 2027 [13].