The equity markets continue to experience volatility due to geopolitical tensions, trade uncertainties, earnings fluctuations, inflationary pressures, and tightening monetary policy. In such an environment, low-beta stocks offer investors stability, steady returns, and protection during market downturns, making them a valuable component of a well-balanced investment portfolio. For those seeking to mitigate risk while still achieving consistent growth, focusing on low-beta stocks can be a strategic approach.
Beta is a key metric used to measure a stock’s sensitivity to overall market movements and its exposure to market risk. It is calculated by comparing the security’s returns to a benchmark index while adjusting for market volatility. A beta of 1.0 indicates that the stock moves in tandem with the market, implying an equal level of risk. A beta below 1.0 suggests lower volatility and reduced risk, making such stocks more defensive. Conversely, a beta above 1.0 signals greater price fluctuations and higher risk. By understanding beta, investors can better anticipate how a stock may respond to market changes and incorporate it into portfolio risk management.
How to Use Beta to Enhance Investment Strategy
In a report on equity betas, John Hancock Investment Management (JHIM) highlighted that beta is not inherently good or bad; its effectiveness depends on an investor’s objectives. A beta of 1.0 is suitable for those investors aiming to match overall market performance, while a beta below 1.0 is ideal for capital preservation and stability. Investors focused on growth, however, may prefer stocks with a beta above 1.0, as these tend to experience higher volatility but also offer greater return potential.
High-beta stocks (beta >1.0) are typically found in growth sectors such as technology, energy, and small-cap stocks, where price swings are more pronounced. Low-beta stocks (beta <1.0), on the other hand, are often value stocks within defensive industries such as utilities and consumer staples, providing stability even in turbulent market conditions.
Impact of AI Investment on Beta and Market Cyclicality
A mid-2024 study on equity beta by the FTSE Russell Global Investment Research team examined significant shifts across various industries, particularly in semiconductors. The increasing investment in AI technologies has driven heightened investor activity and increased risk exposure in the sector. Historically, semiconductor stocks had a beta ranging between 1.0 and 1.2, reflecting their cyclical nature. However, since late 2021, beta in this sector has surged, reaching 1.7 by July 2024, due to AI’s expanding influence in the technology space. The research highlights how structural changes, such as the AI boom, can reshape market dynamics and impact investment risk assessments.
Beyond semiconductors, the study also underscores broader shifts in industry cyclicality over the past five years. Some of these changes stem from long-term economic transformations, like the rise of AI and the shift to green energy, while others result from short-term economic shocks. Certain sectors have experienced rapid changes, altering their classification as either cyclical or defensive investments. The FTSE Russell team advises investors to remain vigilant about these evolving market trends when assessing investment opportunities and managing portfolio risks. Understanding how these shifts affect market behaviour is crucial for successfully positioning investments in different economic cycles.
With that in mind, let us explore the 10 best low beta tech stocks to buy according to analysts.
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Our Methodology
To identify the 10 best low-beta tech stocks recommended by analysts, we first screened all U.S.-listed technology companies with a market capitalization exceeding $2.0 billion. From this selection, we filtered stocks with a beta below 1.0, indicating lower volatility (we used 5-year average beta). Beyond beta, we applied additional criteria, including a return on equity (ROE) of at least 15% and a long-term debt-to-equity ratio below 1.0, ensuring that we chose companies with financial stability. We then narrowed the list further to companies with a potential upside of 10% or more. Ultimately, we sorted the top 10 stocks based on their beta, positioning the lowest beta stock at the top. Additionally, we also included data on hedge fund holdings in these companies as of Q4 2024 to provide further insight into investor interest.
Note: All pricing data is as of market close on March 3.
Why are we interested in the stocks that hedge funds pile into? 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Low Beta Tech Stocks to Buy According to Analysts
10. CACI International Inc (NYSE:CACI)
Beta: 0.89
Potential Upside: 59%
Number of Hedge Fund Holders: 48
CACI International Inc (NYSE:CACI) is a professional services and IT firm that provides a wide range of solutions to various branches of the U.S. federal government, including defense, homeland security, intelligence, and healthcare. The company specializes in delivering advanced technology and expertise to support critical national security operations. Its service offerings include command and control, communications and intelligence solutions, cybersecurity, space mission operations, and data management.
In its Q2 2025 earnings report (fiscal year ending in June), released on January 22, CACI International Inc (NYSE:CACI) reported strong financial performance, with double-digit revenue growth, improved profitability, and an expanding backlog. During the quarter, the company secured $1.2 billion in contracts, with approximately 45% attributed to new business. Additionally, its total backlog grew by 18.2% to $31.8 billion, reflecting increased demand for its services.
On February 6, analysts at Cantor Fitzgerald initiated coverage on five Government Technology & Space stocks, including CACI International Inc (NYSE:CACI), giving it an Overweight rating and setting a price target of $535. While U.S. deficit reduction efforts could contribute to slower growth, the firm expects rising global conflicts to shift Congressional priorities back toward national security. This realignment is likely to benefit defense and intelligence-focused companies such as CACI International Inc (NYSE:CACI).
9. Fabrinet (NYSE:FN)
Beta: 0.89
Potential Upside: 44%
Number of Hedge Fund Holders: 36
Fabrinet (NYSE:FN) specializes in advanced optical packaging and high-precision electro-mechanical and electronic manufacturing services (EMS) for original equipment manufacturers (OEMs) of complex products. The company focuses on producing highly precise components for industries such as optical communications, automotive, industrial lasers, medical devices, and sensors.
Approximately 78% of Fabrinet’s (NYSE:FN) total revenue comes from optical communications products, positioning the company to capitalize on the increasing demand for high-precision manufacturing solutions in this sector. On February 3, Fabrinet reported strong Q2 2025 earnings (fiscal year ending in June), with a 17% year-over-year revenue increase and 4% sequential growth. Earnings per share (EPS) came in at $2.61, surpassing consensus estimates by 4%. While management acknowledged some expected softness in its datacom business for Q3, they anticipate growth to accelerate as next-generation technologies are rolled out throughout the year.
Following the earnings release, Rosenblatt analyst Mike Genovese reaffirmed his Buy rating on Fabrinet (NYSE:FN) and raised his price target from $280 to $285. The current consensus 1-year median target price is $275, suggesting a potential upside of 44%.
8. AppFolio Inc. (NASDAQ:APPF)
Beta: 0.89
Potential Upside: 40%
Number of Hedge Fund Holders: 40
AppFolio Inc. (NASDAQ:APPF) specializes in cloud-based software solutions designed primarily for the real estate industry. Its property management platform helps property managers streamline operations, enhance marketing efforts, and scale their businesses efficiently.
With the real estate sector increasingly embracing digital transformation, AppFolio Inc. (NASDAQ:APPF) is well-positioned to benefit from this trend. During its Q4 2024 earnings call on January 31, company management expressed optimism about the October 2024 acquisition of LiveEasy, a home management and services concierge company. This strategic move aims to simplify the moving process while enhancing convenience and cost savings for renters. The company continued its strong growth trajectory, reporting a 19% year-over-year increase in fourth-quarter revenue to $204 million, driven by an expanding customer base and a rise in total units under management.
Following the earnings report, D.A. Davidson analyst Gil Luria reaffirmed his Buy rating on AppFolio Inc. (NASDAQ:APPF). Additionally, an analyst from Stephens & Co. maintained an Overweight rating on the stock, setting a price target of $295.
7. Sanmina Corp. (NASDAQ:SANM)
Beta: 0.85
Potential Upside: 20%
Number of Hedge Fund Holders: 25
Sanmina Corp. (NASDAQ:SANM) provides integrated manufacturing solutions. The company helps other businesses design, build, and deliver electronic products and offers a full range of services, from product design to manufacturing and shipping to technology companies worldwide. The company’s services span a wide range of industries, including communications networks, medical, defense and aerospace, industrial, cloud infrastructure and automotive.
The company reported a 7% YoY growth in its revenue for Q1 2025 was primarily driven by growth in the communications networks and cloud infrastructure end markets. For fiscal year 2025, the company expects revenue growth to be in the high single digits and is focusing on adding new customers with higher margin opportunities to improve profitability. Sanmina Corp. (NASDAQ:SANM) should continue to gain due to its comprehensive manufacturing capabilities as demand for advanced manufacturing services grows.
The consensus 1-year median price target for the company stands at $92, reflecting a good potential upside of 20%.
6. Cisco Systems Inc. (NASDAQ:CSCO)
Beta: 0.78
Potential Upside: 13%
Number of Hedge Fund Holders: 84
Cisco Systems Inc. (NASDAQ:CSCO) designs, manufactures, and sells networking hardware, software, telecommunications equipment, and other high-technology services and products. The company’s offerings include routers, switches, cybersecurity solutions, and collaboration tools, serving a wide range of industries and customers globally.
Analysts from BofA responded positively to Cisco Systems Inc. (NASDAQ:CSCO)’s Q2 2025 results and better than expected Q3 and FY 2025 guidance. They believe that the company is seeing a demand recovery after a few years of inventory absorption. Moreover, increasing investment in AI infrastructure is also leading to higher demand from cloud, service provider and enterprise verticals. The analysts expected Cisco to witness continued growth momentum in the rest of the year. They raised their price target on the shares to $76 from $72 while maintaining their Buy rating.
5. Clearwater Analytics Holdings Inc. (NYSE:CWAN)
Beta: 0.69
Potential Upside: 19%
Number of Hedge Fund Holders: 48
Clearwater Analytics Holdings Inc. (NYSE:CWAN) provides cloud-based investment accounting and reporting solutions. The company specializes in delivering comprehensive accounting, data, advanced analytics, and highly-configurable reporting for institutional clients, including asset managers, insurance companies, and corporations. Clearwater’s platform automates the aggregation, reconciliation, validation, and reporting of investment data, enabling clients to gain real-time, on-demand insights into their portfolios.
Clearwater Analytics (NYSE:CWAN) is set for growth, backed by its advanced technology and strong customer base. With 80% of its revenue from the U.S., global expansion presents significant opportunities for the company. In that regard, on January 13, 2025, the company announced to acquire Enfusion (NYSE:ENFN) for $1.5 billion to strengthen its investment platform. This deal enhances the company’s position in hedge funds, expanding its addressable market by over $2 billion while increasing its presence in Europe and Asia. Additionally, rising regulatory requirements for investment transparency further boost its value proposition.
On February 20, Piper Sandler analyst Arvind Ramnani upgraded Clearwater Analytics (NYSE:CWAN) from Neutral to Overweight and increased the price target from $28 to $36. While the company’s strong Q4 2024 results exceeded expectations, the analyst’s optimism was primarily driven by Clearwater’s acquisition of Enfusion. This strategic move enhances Clearwater’s capabilities by enabling it to provide clients with a comprehensive, front-to-end data solution. The analyst views the merger as a compelling opportunity to deepen relationships with existing clients and improve success rates in acquiring new ones. Additionally, he believes the company’s initial 2025 targets are conservative, suggesting potential for further upside.
4. Amdocs Limited (NASDAQ:DOX)
Beta: 0.69
Potential Upside: 18%
Number of Hedge Fund Holders: 29
Amdocs Limited (NASDAQ:DOX) delivers software and services to communications, entertainment, and media companies globally. Utilizing advanced technologies such as cloud computing, microservices, DevSecOps, low-code/no-code, edge computing, AI, and GenAI, Amdocs enables clients to engage their customers efficiently and cost-effectively, launch new products and services, automate service and network operations, and monetize connectivity and content.
Following the company’s robust Q1 2025 earnings (FY ends in September), BofA analyst Tal Liani maintained a Buy rating on Amdocs Limited (NASDAQ:DOX) with a consistent price target of $100. According to the analyst, Amdocs has significantly enhanced its operating margin through the discontinuation of non-core businesses and improved operational efficiencies. Although the company has experienced slow growth due to spending constraints among service providers, its outlook remains positive. Cloud services, now comprising over 25% of total revenue, continue to grow at a double-digit rate. Moreover, the analyst highlights that major service providers and cable MSOs have significant projects in the pipeline, bolstering Amdocs Limited (NASDAQ:DOX)’s long-term growth prospects.
3. Akamai Technologies Inc. (NASDAQ:AKAM)
Beta: 0.68
Potential Upside: 30%
Number of Hedge Fund Holders: 37
Akamai Technologies Inc. (NASDAQ:AKAM) is a global content delivery network (CDN) and cloud services provider, ensuring fast content delivery while safeguarding against cyber threats. The company’s platform enhances website performance and secures online data.
In its Q4 2024 earnings report released on February 20, Akamai Technologies Inc. (NASDAQ:AKAM) posted revenue of $1.02 billion, reflecting 3% year-over-year growth (adjusted for FX) and aligning with expectations. Segment-wise, security and compute revenue saw a 16% increase, though this was partially offset by an 18% decline in delivery revenue. The company is currently undergoing a multi-year transition from a CDN pioneer to a cybersecurity and cloud computing firm. For the quarter, earnings per share (EPS) stood at $1.66, exceeding consensus estimates by 9%. However, its 2025 guidance came in slightly below expectations, as management cited political challenges faced by its largest customer, which is shifting toward a do-it-yourself (DIY) strategy. This transition is expected to impact revenue growth by 1%-2% over the next few years.
Following the earnings report, Susquehanna analyst Shyam Patil maintained a Positive rating on Akamai Technologies Inc. (NASDAQ:AKAM) but lowered his price target from $110 to $105. While he acknowledged solid Q4 results, he noted that the 2025 outlook appeared soft due to forex headwinds, traffic growth trends, and challenges related to the company’s largest customer. Despite these concerns, he remained optimistic about long-term growth, as management reaffirmed its commitment to achieving its 3-5-year revenue target. Similarly, Oppenheimer analyst Timothy Horan maintained an Outperform rating but reduced his price target from $120 to $116.
2. Commvault Systems Inc. (NASDAQ:CVLT)
Beta: 0.62
Potential Upside: 11%
Number of Hedge Fund Holders: 35
Commvault Systems Inc. (NASDAQ:CVLT) is a data protection and information management software company. The company provides solutions for data backup and recovery, cloud and infrastructure management, retention, and compliance. Its software platform helps organizations protect, access, and use all of their data, anywhere and anytime.
A William Blair analyst upgraded Commvault Systems Inc. (NASDAQ:CVLT) to Outperform from Market Perform, citing strong growth potential in the evolving backup and recovery market which is now becoming a critical cybersecurity concern. The analyst sees the company’s operating leverage as a key driver for future growth, especially as the impact of recent acquisitions stabilizes. The company is well-positioned for revenue and earnings growth with economies of scale and expanded cross-selling opportunities. According to the analyst, better revenue and earnings will be the primary catalyst for Commvault Systems Inc. (NASDAQ:CVLT)’s valuation rather than multiple expansion.
1. Zoom Communications Inc. (NASDAQ:ZM)
Beta: 0.25
Potential Upside: 24%
Number of Hedge Fund Holders: 48
Zoom Communications Inc. (NASDAQ:ZM) is a communications and collaboration technology company best known for its videoconferencing applications, Zoom and Zoom Workplace. Its video-first platform offers a range of communication tools, including video meetings, voice services, webinars, and chat, accessible across desktops, phones, mobile devices, and conference room systems.
On February 24, Zoom Communications Inc. (NASDAQ:ZM) reported steady Q4 2024 results (FY ending January), with revenue reaching $1.18 billion, reflecting 3.3% year-over-year growth. The company’s AI-powered solutions contributed to a 7.3% increase in the number of customers generating over $100,000 in trailing 12-month revenue. Earnings per share (EPS) came in at $1.41, surpassing the consensus estimate of $1.35. However, its guidance came in slightly softer than expected. For FY 2026, Zoom Communications Inc. (NASDAQ:ZM) projects total revenue in constant currency between $4.8 billion and $4.81 billion, while EPS is expected to be in the range of $5.34-$5.37, falling short of the street expectation of approximately $5.56.
Following the earnings release, analysts had mixed reactions, with many maintaining a cautious outlook. However, Wedbush analyst Daniel Ives reiterated his Buy rating on February 25, setting a price target of $95. The current consensus one-year median price target stands at $92, suggesting a potential upside of 24%.
While we acknowledge the potential of ZM 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 ZM 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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