Stocks to buy

The 3 Most Undervalued Tech Stocks to Buy Now

The Nasdaq index is up 30% on the year. However, there are still bargains to be found among the wide-ranging world of tech stocks.

Some of the biggest and most well-known names in tech have underperformed. Some have badly trailed the market in recent months, and are currently trading at undervalued levels.

Accordingly, while many stocks associated with artificial intelligence have skyrocketed, shares of companies in less-desirable industries haven’t performed as well. Companies involved in wireless internet, personal computers, telecommunications equipment, online payments, and e-commerce have not enjoyed the same rally.

That said, this presents an opportunity to investors who are hunting for bargains among growth stocks. Investors who get in on undervalued tech stocks now can ride them to big future gains as the market rally broadens out and a rising tide lifts all boats. Here are three of the most undervalued tech stocks investors may want to consider right now.

Amazon (AMZN)

Source: Jonathan Weiss /

Among mega-cap tech stocks, e-commerce giant Amazon (NASDAQ:AMZN) has been the laggard this year. Since January, AMZN stock has gained 50% while Meta Platforms’ (NASDAQ:META) stock has increased 127% and Nvidia’s (NASDAQ:NVDA) share price has risen 190%, at the time of wiring. Amazon’s stock also remains below its 52-week high and well beneath its all-time high reached two years ago. For investors searching for undervalued tech stocks, there is still an opportunity to take a position in Amazon and ride its recovery higher.

Analysts are increasingly pounding the table on AMZN stock. Investment bank Roth/MKM just named Amazon its top mega-cap stock pick and raised its price target on the shares to $155 from $130. The raised price target implies 21% upside from current levels. Roth/MKM also maintained its “buy” rating on AMZN stock and said that the e-commerce company stands to gain from the current artificial intelligence craze. Notably, Amazon’s financials are also expected to improve after the company aggressively cut staff and curtailed spending earlier this year.

Dell Technologies (DELL)

Source: Jonathan Weiss /

Personal computer (PC) maker Dell Technologies (NYSE:DELL) is another woefully undervalued technology stock. Over the past two years, DELL stock has barely budged. And while this PC maker has seen some momentum of late, it’s clear that this is a company that hasn’t seen the kind of move many of its peers have this year.

Fundamentally, Dell is also an attractive company to consider. Its price-earnings ratio of 19-times is low for a tech company of Dell’s size. And, the stock offers shareholders a quarterly dividend payment of 37 cents, which equates to a yield of 2.9%. That’s reasonable for any publicly-traded company, but exceptionally high for a technology stock.

The poor performance of DELL stock can be attributed to slumping sales of personal computers. In this year’s first quarter, global shipments of PCs declined 29% from a year earlier due to weak demand, excess inventory, and a deteriorating global economy, according to market research firm International Data Corporation (IDC). That has led investors to take a wait-and-see approach to DELL stock. However, the PC market can be expected to recover, and with it, Dell’s share price. In the meantime, there is the dividend for shareholders to enjoy as they patiently wait for capital appreciation over the long-term.

Cisco Systems (CSCO)

Source: Ken Wolter /

Another undervalued tech stock to consider is Cisco Systems (NASDAQ:CSCO). The telecommunications equipment manufacturer’s share price has badly trailed other major tech firms and the Nasdaq index this year. So far in 2023, CSCO stock has gained 6%. Over five years, its share price is up roughly 20%. The stock’s price-earnings ratio sits at a low 18-times, suggesting it’s cheap right now. And investors who take a position benefit from a quarterly dividend of 39 cents that yields 3.1%, which isn’t bad at all for a legacy tech giant.

Notably, CSCO stock has been hurt by concerns over future demand for the telecom and networking hardware the company makes. Cisco reported a 23% decline in total product orders in its most recent quarter, which prompted many investors to reach for the sell button. However, the company still managed to report blockbuster financial results that beat consensus Wall Street forecasts, raising its forward guidance for this year. Cisco, which has been a going concern for nearly 40 years, should be fine long-term.

On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.