11 Oversold Blue Chip Stocks to Buy According to Hedge Funds

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1. Adobe Inc. (NASDAQ:ADBE)

% Decline Over Past 1 Year: ~19.8%

Number of Hedge Fund Holders: 117

Market Cap as on March 7: $195.6 billion

Adobe Inc. (NASDAQ:ADBE) operates as a technology company. Keith Bachman, an analyst from BMO Capital, maintained a “Buy” rating on the company’s stock. The associated price target remains the same at $515.00. The rating was backed by factors including the company’s consistent performance and market leadership. As per the analyst, Adobe Inc. (NASDAQ:ADBE)’s robust position in its core product categories, such as Creative Cloud, Document Cloud, and Experience Cloud, continues to reinforce its growth potential. The integration of AI and Adobe Express can contribute positively to net new ARR and overall growth, aiding the analyst’s rating.

Elsewhere, Michael Turrin, an analyst from Wells Fargo, maintained a “Buy” rating on Adobe Inc. (NASDAQ:ADBE)’s stock. The rating stemmed from the company’s promising start to the year in both the Digital Media and Digital Experience segments. Additionally, the valuation of Adobe Inc. (NASDAQ:ADBE)’s shares appears attractive, which suggests growth potential. The analyst also believes that the company can capitalize on multiple AI-enabled product cycles, aided by its robust market position and expected product developments.

Polen Capital, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“We added to several existing positions in the quarter including Adobe Inc. (NASDAQ:ADBE), Workday, Shopify, MSCI, and Paycom Software. We feel Adobe is poised for re-accelerating revenue and earnings growth partially due to the monetization of its Firefly GenAI product embedded in its creative software.”

While we acknowledge the potential of ADBE as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than ADBE 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 30 Best Stocks to Buy Now According to Billionaires.

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