In this article, we will take a look at the 10 Best Information Technology Services Stocks to Buy Right Now.
The U.S. is the powerhouse when it comes to technology and information technology services. The U.S. is well-placed to continue to dominate the technology space, as per AXA Investment Managers. The AI boom led the market rally in 2024, with the broader market soaring over 25% last year. Whereas, the NASDAQ-100 Technology Sector experienced a similar surge of just over 25% in 2024. Over the past five years, the index has returned more than 133% as tech companies continue to dominate the broader market.
Also Read: 10 Best Very Cheap Stocks To Buy Right Now
AXA Investment Managers mentioned that the guidance from tech companies amid the new products and services indicates earnings growth will remain healthy moving forward. According to the report from Research and Markets, the United States Information Technology Services market is estimated to be valued at $461.03 billion as of 2024 and is projected to reach $630.76 billion by 2029, growing at a CAGR of 6.47% between 2024 and 2029.
Analysts are revising price targets on IT service companies that are involved in government contracts. The Trump administration’s latest policies pose a threat to companies that are offering IT related services to various government departments. The Department of Government Efficiency (DOGE), which Elon Musk leads, has conducted a campaign to radically downsize the federal government and discontinue numerous agency employees. Musk’s actions are not received well by industry executives. DOGE recently ordered the dismantling of the U.S. Agency for International Development (USAID), raising concerns about the control of massive databases with sensitive information by DOGE. The department is also pushing for authorized access to IRS data systems right in the middle of the tax filing season. Musk-led department is also expected to target the Pentagon soon, pledging cost cuts.
Despite these short-term risks and department scrutiny, the U.S. tech sector is set to grow with the advancement of AI and its increasing daily use cases. Analysts identify several IT services stocks with massive upside potential. With that said, let’s take a look at the 10 Best Information Technology Services Stocks to Buy Right Now.
A high-rise office building, its staff busy at work providing cybersecurity services.
Our Methodology
We used the Finviz screener to compile a list of Information Technology Services stocks with an analyst upside of more than 20% as of February 17. We have also added the hedge fund sentiment around the stocks, as of Q3 2024. The stocks are sorted in ascending order of their hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Information Technology Services Stocks to Buy Right Now
10. Concentrix Corporation (NASDAQ:CNXC)
Analyst Upside: 31.96%
No. of Hedge Fund Holders: 21
Concentrix Corporation (NASDAQ:CNXC) offers global customer experience solutions, including automation, analytics, and digital transformation services. The company provides its solutions across a wide range of industries including technology, retail, banking, communications, and healthcare. Concentrix generates revenue through billing for service hours or transaction volumes processed for clients. Concentrix has a broad market presence with operations in North America, EMEA, APAC, and LATAM.
Concentrix Corporation (NASDAQ:CNXC) was recently recognized as the Highest Leader in Everest Group’s inaugural B2B Sales Services PEAK Matrix Assessment. The company was recognized for its market impact, successful service delivery, strategic integration of AI, and strong partner ecosystem. Concentrix continues to expand its market adoption and excel in vision, innovation, and delivery footprint, solidifying its position as a top provider in the B2B sales services sector.
Concentrix Corporation achieved a remarkable client revenue retention rate of nearly 99% in FY2024. The company’s development into new solutions such as data annotation, AI design, and cybersecurity, contributed approximately $1 billion in revenue in 2024.
FPA Queens Road Small Cap Value Fund stated the following regarding Concentrix Corporation (NASDAQ:CNXC) in its Q3 2024 investor letter:
“Concentrix Corporation (NASDAQ:CNXC) is one of two top customer experience (CX) vendors globally. The company began by managing call centers but has since evolved into a high-tech business process outsourcer (BPO) that also designs and runs customer-facing websites and apps, integrates the data, and optimizes a client’s customer interactions. The company was spun out from TD Synnex, another of the Fund’s core holdings, and we have always been impressed with CNXC’s innovation and growth. CX is a relatively new business model, and Concentrix has been rolling up smaller competitors. In March 2023 they bought WebHelp, a leading European CX player, for $4.8B in cash and stock. 22 We believe the WebHelp acquisition will help consolidate an industry where Concentrix and Teleperformance are the largest players.
9. TTEC Holdings, Inc. (NASDAQ:TTEC)
Analyst Upside: 92.96%
No. of Hedge Fund Holders: 24
TTEC Holdings, Inc. (NASDAQ:TTEC) provides technology-enabled solutions for digital and live interactions. Its services include a contact center as a service, AI-powered analytics, and omnichannel customer care, among others.
TTEC operates in the $600 billion CX industry, offering outsourced customer service solutions. Despite the company’s modest $169 million market capitalization, it generated around $2.26 billion in revenue over the last twelve months, indicating an extremely undervalued stock trading at just 0.07x price-to-sales. TTEC Holdings, Inc. competes with leading players such as Concentrix, Teleperformance, Genpact, and TaskUs, also maintaining a strong position across diverse industries, including finance, healthcare, and automotive.
TTEC’s depressed valuation is largely due to broader market concerns over AI replacing conventional CX services. However, AI is being integrated across the industry rather than eliminating the demand for human-driven CX solutions. Moreover, TTEC Holdings, Inc. (NASDAQ:TTEC) is advancing its AI with the launch of its technology innovation environment called SandcastleCX.
TTEC Holdings, Inc. (NASDAQ:TTEC) has a strong foothold in its business segments, with its traditional CX operations operated by 50,000 employees and a fast-growing $463 million Cloud, AI, and SaaS division. TTEC’s long-term potential is convincing.
8. Science Applications International Corporation (NASDAQ:SAIC)
Analyst Upside: 22.86%
No. of Hedge Fund Holders: 25
Science Applications International Corporation (NASDAQ:SAIC) provides technical, engineering, and enterprise information technology (IT) services mainly in the United States. The Business Intelligence Group named SAIC’s ReadyOne software a winning product at the 2024 BIG Innovation Awards. ReadyOne is a platform offering services to rapidly install and configure readily usable digital engineering ecosystems for engineering teams and stakeholders. This shows SAIC’s commitment to AI and adaptability to changing market trends.
Science Applications International Corporation (NASDAQ:SAIC) posted strong financial growth in FY2024, with full-year revenue reported around $7.44 billion, up by 7.4% year-over-year. Whereas, Q4 2024 revenue was $1.74 billion, indicating 7.7% organic growth from a year ago. This organic growth reflects the company’s ability to continue steady business expansion despite structural changes.
On January 8, Wells Fargo analyst Matthew Akers downgraded the price target on SAIC shares from $154 to $149, keeping an Overweight rating on the stock. The analyst remains optimistic about SAIC, however, funding concerns for U.S. defense and DOGE risk have led to a downgrade in price target.
7. Applied Digital Corporation (NASDAQ:APLD)
Analyst Upside: 31.72%
No. of Hedge Fund Holders: 26
Applied Digital Corporation (NASDAQ:APLD) offers digital infrastructure, cloud services, and high-performance computing solutions for AI, machine learning, and crypto mining across North America. Originally a crypto miner, the company quit its mining operations in March 2022 and transitioned to providing digital infrastructure solutions and cloud services to the fast-growing sectors of High-Performance Computing (HPC) and AI.
Applied Digital Corporation (NASDAQ:APLD) has demonstrated strong performance across its Data Center Hosting (DCH) business, which generated over 85% of the company’s revenue in FY2024. APLD’s Cloud Services (CS) business, which offers high-performance computing power for AI and ML applications, accounted for 17% of total revenue. The company has diversified its revenue base, with its CS revenue growing over 523% year-on-year as of Q2 FY 2025.
On February 4, Northland Securities analyst Michael Grondahl increased the price target on APLD shares from $12 to $20, maintaining a Buy rating on the stock. The company has secured $375 million in financing through its HPC subsidiary, APLD HPC Holdings LLC, with SMBC. This will allow the company to pay off its Macquarie Capital senior secured note while investing the remaining capital to develop two data center buildings at the Ellendale HPC Campus. CFO Saidal Mohmand noted that Applied Digital Corporation plans to replace the SMBC loan with permanent project financing once a hyperscale lease is secured.
6. N-able, Inc. (NYSE:NABL)
Analyst Upside: 20.87%
No. of Hedge Fund Holders: 27
N-able, Inc. (NYSE:NABL) is a cloud-based IT management and security solutions provider for managed service providers (MSPs). The company’s products improve the efficiency and effectiveness of IT service delivery, such as remote monitoring and management, backup and disaster recovery, and cybersecurity solutions.
The company’s recently launched Adlumin Managed Detection and Response (MDR) solution at Ventnor City has already demonstrated its effectiveness, successfully preventing a cyber-attack within six hours of deployment. The AI-powered solution was able to protect the city’s police department from attempted intrusion. The MDR solution supports quick threat mitigation, with both automated and human response capabilities, and uses AI to identify threats.
On January 21, RBC Capital analyst Matthew Hedberg downgraded the price target on NABL shares from $15 to $12 and kept an Outperform rating on the stock. The analyst sees N-able, Inc. (NYSE:NABL) to have a conservative to start to 2025 as things will get better moving forward. Hedberg expects in-line to slightly better results following a solid Q3 2024 and the mid-quarter acquisition of Adlumin, which resulted in updated guidance for Q4 2024. The company expects its Q4 revenue to be in the range of $111.5 to $113 million, representing 3% to 4% year-over-year growth.
Conestoga Capital Advisors stated the following regarding N-able, Inc. (NYSE:NABL) in its Q4 2024 investor letter:
“Founded in 2000, N-able, Inc. (NYSE:NABL) is a leading software provider to managed service providers (MSPs), with over 25,000 customers. MSPs are essentially outsourced IT departments that, in turn, sell these tools downstream to small- to medium-sized businesses of all kinds. NABL is a 100% recurring revenue business that provides software tools, including security, data protection, and remote monitoring, to its MSP customers. NABL has a nearly $40 billion total addressable market, with durable tailwinds as the complexity of security, cloud migrations, and data storage increase.”
5. NCR Voyix Corporation (NYSE:VYX)
Analyst Upside: 30.19%
No. of Hedge Fund Holders: 30
NCR Voyix Corporation (NYSE:VYX) is an Information Technology firm that provides a cloud-based platform and other solutions to retail stores and restaurants. The company serves more than 75,000 retail lines and over 30,000 restaurant sites. Some of its leading customers include Walmart, Target, Circle K, and Fifth Group. On average, NCR Voyix Corporation supports around 26 million transactions per hour and sells 1.2 billion items per month.
NCR Voyix Corporation (NYSE:VYX) was recognized as a leader in the POS software market for full-service and quick-service restaurants in the latest IDC MarketScape Reports. Here is what the report cited about NCR’s strong market position in the sector:
“NCR Voyix is taking a fresh approach to modernization. This method focuses on innovation impact and uninterrupted operations, helping brands innovate with minimal disruption. NCR Voyix has positioned itself as a cloud platform player with strong end-to-end omni-channel support, reporting and analytics, marketing/loyalty, and operational management.”
The company is expanding its cloud-native commerce platform, which experienced a 25% increase in sites during Q3 2024, reflecting strong growth in its digital transformation efforts. NCR Voyix Corporation (NYSE:VYX) has sold its digital banking segment, generating $2.45 billion in gross proceeds and strengthening its balance sheet. This has reduced NCR’s indebtedness by almost $1.8 billion and reduced its annual cash interest expense by approximately $95 million. This will improve the company’s earnings in the upcoming quarters.
4. Parsons Corporation (NYSE:PSN)
Analyst Upside: 49.06%
No. of Hedge Fund Holders: 30
Parsons Corporation (NYSE:PSN) offers solutions and services for the security environment, unprecedented global infrastructure demand, and digital transformation. The company operates through two segments including Federal Solutions and Critical Infrastructure. The company’s digital solutions are focused on aviation, rail and transit, bridges, roads, and highways, leveraging sensors and data to drive smart sustainable infrastructure.
On January 24, Jefferies analyst Sheila Kahyaoglu lowered the price target on PSN shares from $110 to $100, keeping a Buy rating on the stock. The analyst downgraded the price target on PSN due to the “elevated risk” from the Department of State Humanitarian contract. However, the company will not miss $550 million or 8% of its sales due to the absence of the contract.
Parsons Corporation (NYSE:PSN) recorded a remarkable growth in the 2023-2024 period, with a 23% organic growth. The company’s performance is expected to slow down in the 2025-2026 period, with organic growth dropping to only 5%. The company is well-positioned and benefits from high government infrastructure spending in America, in addition to its initiatives in the Mideast. Parsons has reflected strong performance with revenue growth of just under 29% in the last twelve months, reaching $6.51 billion. On average, analysts expect Parsons Corporation’s (NYSE:PSN) EPS to rise to $3.93 in 2025 from $3.40 in 2024.
3. Leidos Holdings, Inc. (NYSE:LDOS)
Analyst Upside: 24.75%
No. of Hedge Fund Holders: 34
Leidos Holdings, Inc. (NYSE:LDOS) develops smarter technology solutions, particularly for customers in highly regulated industries. The company’s services are utilized across the defense, intelligence, civil, and health markets. The company serves the US government, international allies, and commercial clients.
Leidos Holdings, Inc.’s (NYSE:LDOS) National Security segment experienced 5.5% year-over-year growth in Q4 2024. Although the segment’s profit margin dropped slightly during Q4 due to project variations, its full-year margin exceeded expectations. The company expects its profit margin to continue the growth momentum in this segment. For 2025, the company anticipates its total revenue to increase by 4% year-over-year, reaching between $16.9 billion and $17.3 billion.
On February 12, Wells Fargo analyst Matthew Akers slightly downgraded the price target on LDOS shares from $199 to $197, maintaining an Overweight rating on the shares. Akers expects an upside to Leidos’ 2025 outlook for both top line and margins.
2. CACI International Inc (NYSE:CACI)
Analyst Upside: 58.05%
No. of Hedge Fund Holders: 38
CACI International Inc (NYSE:CACI) offers expertise and technology solutions for national security across intelligence, defense, and federal civilian sectors. The company operates through Domestic and International segments, providing digital modernization, C4ISR, cyber, space, logistics, engineering, IT, and mission support solutions to government and commercial clients.
On January 23, Raymond James analyst Brian Gesuale elevated the price target on CACI shares from $475 to $490, keeping an Outperform rating on the shares. Gesuale cited that CACI International Inc’s (NYSE:CACI) shift towards a higher value technology offering, and transition from a portfolio that was historically 80% expertise, has led to a positive change in business mix. The analyst added that this has contributed to an approximate 200 basis point increase in EBITDA margin over the past eight years. Moreover, CACI’s recent performance backs this growth momentum.
Meridian Contrarian Fund remains highly bullish on the company, which is their largest holding. The fund cites its essential role in US defense IT infrastructure and consistent growth over a 10+ year investment period. It stated the following in its Q3 2024 investor letter:
“CACI International Inc (NYSE:CACI) is an IT consultant and provider of mission-critical technology to the U.S. Government and its agencies, which account for nearly 95% of its sales. CACI plays a vital role in modernizing IT infrastructure, systems, and other essential defense needs for the U.S. We have held CACI for over 10 years as the company has consistently grown into a larger supplier to the U.S., and increasingly, to our allies. The company’s stable growth and role as an essential provider of U.S. defense infrastructure were recognized by the market, delivering a solid return for shareholders in the quarter. We maintained our position throughout the period and, as of quarter-end, CACI was the Fund’s largest holding.”
1. Fidelity National Information Services, Inc. (NYSE:FIS)
Analyst Upside: 23.22%
No. of Hedge Fund Holders: 56
Fidelity National Information Services, Inc. (NYSE:FIS) provides financial services technology solutions for financial institutions, businesses, and developers. Over the last five trading sessions, FIS shares have fallen over 15% as the company missed analysts’ estimates for the 2025 guidance.
On February 11, BofA Securities reduced the price target on FIS shares from $96 to $87 while keeping a Buy rating on the stock. The analyst revised the price target followed by the 2025 guidance and its FCF conversion rate for 2024, which was reported at 77%, falling short of the expected 85%. The drop in the FCF conversion rate was mainly due to increased costs from IT providers and working capital deficits. The company’s new sales of digital solutions experienced a 70% year-over-year growth, driven by cross-sales into core clients.
For 2025, the company expects its FCF conversion rate to be around 82% and 85%, with improvements expected, driven by better accounts payable and receivable management. Fidelity National Information Services, Inc. (NYSE:FIS) returned $4.8 billion to shareholders through share repurchases and dividends in 2024, including $1.2 billion in the fourth quarter.
While we acknowledge the potential of FIS to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FIS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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