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Top 12 Undervalued Tech Stocks According to Wall Street Analysts

Ramish Cheema
9 min read

In This Article:

In this piece, we will take a look at the top 12 undervalued technology stocks according to Wall Street analysts. If you want to skip our introduction to the technology sector, the stock market, and the latest details about the U.S. economy, then head on over to Top 5 Undervalued Tech Stocks According to Wall Street Analysts.

The technology industry has been at the center of the stock market and the economy this year. As tech stocks tumbled in 2022 after inflation and interest rates soared, investors had quite an appetite for the stocks this year as evidenced by the massive bull run in technology dominated stock indexes in 2023. The tech sector was helped particularly by the growing interest in artificial intelligence and associated technologies, and shifting investor sentiments about an impending recession in America has also helped the sector. Technology firms tend to do well in a growing economy as their products are generally more sensitive to spending patterns. More discretionary income for customers allows them to make pricier tech purchases, and a loose capital environment also helps firms expand their technology infrastructure to set up data centers, cloud computing divisions, and other facilities.

However, after major technology firms saw their share prices more than double during the first half of this year and the tech heavy NASDAQ 100 index posted 45% gains during the same time period, there are worries that the rally might be over and the second half might not prove to be similarly lucrative in providing stock market returns. From the 11th of July to the 11th of August, the NASDAQ 100 has posted a mere 0.06% in returns as it has gained only 9.78 points. August has seen several data releases that not only show that the Federal Reserve's aggressive interest rate hikes to reduce inflation are working, but also that there might be some strength left in some segments that might incentivize the central bank to raise interest rates more.

The most important data release for the month is the Labor Department's Consumer Price Index (CPI). This is the report for inflation and the latest data shows that in July, prices rose by 0.2% - for a rate that stood flat over the June figures. Annually, the inflation stood at 3.2% in the month, for a small 0.2% decrease over June's annual figures but this was expected by analysts. Crucially, and especially when it comes to potential future interest rate increases by the Federal Reserve, core inflation came in at 4.7% - which was lower than the Dow Jones estimate of 4.8%. The biggest contributors to inflation in America in June 2023 were elevated shelter and transportation services prices, which grew by 7.7% and 9% on an annual rate, respectively.

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