In this article, we discuss 13 Most Undervalued NASDAQ Stocks To Buy According To Hedge Funds.
The NASDAQ Index closed more than 10% below its December high of 20,174 on March 6, 2025. This officially puts the index in a market correction – which has happened a dozen times since 2010. Historically, the index has delivered an average return of 21% in the 12 months following its first close in correction territory, compared to an annual average of 15% over the entire period. This suggests that past corrections have often been followed by above average gains. Meanwhile, proposed tariffs under the Trump administration could significantly affect trade. As of February 27, 2025, these tariffs were set to raise the average tax on US imports to 13.8%, which is the highest level since 1939. Some duties are already in effect, shaking up the stock market.
Adding to market uncertainty is the current government’s inconsistent trade policy. Initially, tariffs were set to take effect on Chinese, Canadian, and Mexican imports on February 4. However, duties on Canadian and Mexican goods were postponed until March 4, then further adjusted on March 6, granting exemptions until April 2 for goods complying with the free trade agreement. These back-and-forth policy changes have contributed to market volatility. Despite the uncertainty, history shows that the NASDAQ has recovered from every past correction, suggesting this pullback could present a buying opportunity for investors.
Understandably, the market has seen considerable movement this year, influenced by earnings reports, concerns over DeepSeek, and uncertainty around President Trump’s tariff policies. With rising volatility, investors should focus on fundamentals, take a long-term approach, and carefully evaluate valuations. As of February 28, 2025, the US stock market was trading about 1% below fair value. Morningstar’s 2025 US Market Outlook suggests that the market was approaching the upper end of its fair value range, noting investors should set realistic expectations for returns. Morningstar advised favoring value stocks over growth stocks, as growth stocks were priced at their highest premium since the 2021 tech boom, while value stocks remained undervalued. In a market where economic policies can quickly shift valuations, portfolio positioning is crucial. Regardless of short-term tariff impacts, investors should focus on stocks trading well below their long-term value while being cautious with overvalued ones.
In a turbulent market where growth stocks are tumbling and value stocks have gained, sector valuations are starting to balance out. Healthcare, real estate, and basic materials, which were undervalued at the start of 2025, have moved closer to fair value. Meanwhile, consumer cyclical stocks, previously the most overvalued, have now dropped to fair value. Some sectors have moved differently, like communication services becoming more undervalued, while consumer defensive stocks have continued to rise and are now the most overvalued, trading at a 17% premium. Keeping that in mind, let’s take a look at some of the most undervalued NASDAQ stocks to invest in.
Photo by Pascal Bernardon on Unsplash
Our Methodology
For this article, we used the Finviz screener to filter out stocks listed on the NASDAQ exchange with a forward P/E ratio of less than 15. Using Insider Monkey’s Q4 2024 hedge fund database, we examined the hedge fund sentiment for each stock and selected 13 most popular ones. The stocks are ranked in ascending order based on the number of hedge fund holders as of Q4 2024. We have also mentioned the forward P/E ratio as of March 12 for each company.
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).
13. Dollar Tree, Inc. (NASDAQ:DLTR)
Number of Hedge Fund Holders: 64
Forward P/E Ratio as of March 12: 11.10
Dollar Tree, Inc. (NASDAQ:DLTR) runs discount retail stores under Dollar Tree and Family Dollar brands. On February 21, 2025, Bernstein analysts assigned a Market Perform rating and an $80 price target for DLTR. They outlined three scenarios for Family Dollar, with the most optimistic being a $2.4 billion sale. The chain has $4 billion in lease liabilities and currently operates on a slim 0.5% EBIT margin, meaning the company might need to offer incentives to make the sale happen. It is one of the most undervalued stocks to invest in.
Dollar Tree and Family Dollar had a solid Q3 2024, with sales reaching the high end of expectations. A big win came from non-comp store sales, with Dollar Tree’s revenue tripling year-over-year, due to new store openings and a strong launch for the $0.99 Only portfolio. Same-store sales improved across the board, and Family Dollar even saw its first positive discretionary comp since 2022. Inventory stayed steady at $5.5 billion, while cash flow got a significant boost, with $786 million generated from operations, up from $506 million last year.
Among the hedge funds tracked by Insider Monkey, 64 funds were bullish on Dollar Tree, Inc. (NASDAQ:DLTR) at the end of Q4 2024, compared to 40 funds that invested in the stock in the prior quarter.
12. First Solar, Inc. (NASDAQ:FSLR)
Number of Hedge Fund Holders: 65
Forward P/E Ratio as of March 12: 7.53
First Solar, Inc. (NASDAQ:FSLR) ranks 12th on our list of the most undervalued stocks. It is an Arizona-based solar technology company that develops and sells photovoltaic (PV) solar energy solutions worldwide. On February 25, it was announced that an American solar cell manufacturer, Talon PV, has licensed key TOPCon technology patents from First Solar, Inc. (NASDAQ:FSLR). This move is a major step for Talon’s N-type TOPCon facility, set to launch in Q1 2026 and provide up to 4 GW of annual production by Q1 2027. The patents include multiple countries, such as the US, EU, China, Japan, and Canada, with some of them remaining valid through 2030 and beyond.
First Solar, Inc. (NASDAQ:FSLR) reported lower than anticipated profit for Q4 and the full year, mainly due to two factors. In December 2024, the company sold $857 million in tax credits to Visa, but because of a $39 million discount, its Q4 profit margin dropped by 3 percentage points and the full-year margin by 1 percentage point. FSLR received $616 million from the deal in Q4, with another $202 million expected in early 2025. Secondly, manufacturing issues with its Series 7 solar panels led to warranty costs estimated between $56 million and $100 million, with $50 million recorded in Q3 and $6 million in Q4. By the end of 2024, the company had $1.8 billion in cash and investments.
Among the hedge funds tracked by Insider Monkey in the fourth quarter of 2024, First Solar, Inc. (NASDAQ:FSLR) was part of 65 public stock portfolios, compared to 59 in the earlier quarter.
11. Charter Communications, Inc. (NASDAQ:CHTR)
Number of Hedge Fund Holders: 71
Forward P/E Ratio as of March 12: 10.19
Charter Communications, Inc. (NASDAQ:CHTR) is a Connecticut-based broadband and cable provider that offers internet, TV, mobile, and voice services to customers across the United States. It is one of the most undervalued stocks. On January 31, Benchmark analyst Matthew Harrigan issued a Buy rating on CHTR with a price target of $450 ahead of the company’s earnings release. While broadband prices may drop, Harrigan expected Charter had already adjusted its bundled pricing to retain customers, highlighting the company’s proactive approach in a competitive market.
In 2024, Charter Communications, Inc. (NASDAQ:CHTR)’s revenue grew by 1%, while full-year EBITDA rose by 3.1%, driven by strong mobile growth, cost-saving efforts, and political advertising. In Q4, adjusted EBITDA was reduced by about $35 million due to hurricane-related customer credits and revenue impacts, while storm-related expenses added approximately $125 million in capital expenditures. Free cash flow for the quarter was $984 million, down $80 million from the previous year, mainly due to higher capital spending, taxes, and interest costs, partially offset by improved cable working capital and higher EBITDA.
According to Insider Monkey’s fourth quarter database, 71 hedge funds were bullish on Charter Communications, Inc. (NASDAQ:CHTR), up from 61 funds in the preceding quarter. Natixis Global Asset Management’s Harris Associates held the biggest position in the company, with 4.34 million shares worth approximately $1.49 billion.
10. Expedia Group, Inc. (NASDAQ:EXPE)
Number of Hedge Fund Holders: 72
Forward P/E Ratio as of March 12: 12.52
Expedia Group, Inc. (NASDAQ:EXPE) is an online travel company serving customers in the US and worldwide. It operates through its B2C, B2B, and Trivago segments, providing travel-related services such as lodging, flights, and partnerships with different travel and non-travel businesses, including airlines, travel agents, and online retailers. On March 3, Expedia Group announced a partnership with major airlines like Hawaiian Airlines, Avianca, and Turkish Airlines to tap into growing demand as air travel is expected to reach 5.2 billion passengers this year. Its Flights Sponsored Listings played a role in driving an 8% rise in ticket sales and a 10% increase in booking value for participating airlines.
Expedia Group, Inc. (NASDAQ:EXPE) ended 2024 on a strong note, with fourth quarter revenue reaching $3.2 billion, a 10% increase driven by a 21% growth in its B2B segment. Revenue growth also accelerated by seven percentage points from the previous quarter, supported by Vrbo’s steady booking momentum throughout the year and continued improvements at Hotels.com. The company generated $2.3 billion in free cash flow, up 26% year-over-year, mainly due to higher EBITDA, growth in deferred merchant bookings, and lower capital expenditures. With this strong cash flow, Expedia closed the quarter with $4.5 billion in unrestricted cash and short-term investments. It ranks 10th among our list of the most undervalued stocks.
Among the hedge funds tracked by Insider Monkey, 72 funds were bullish on Expedia Group, Inc. (NASDAQ:EXPE) at the end of Q4 2024, compared to 52 funds that invested in the stock in the prior quarter. Windacre Partnership was the largest shareholder of the company, with 4 million shares valued at $757.5 million.
9. Gilead Sciences, Inc. (NASDAQ:GILD)
Number of Hedge Fund Holders: 74
Forward P/E Ratio as of March 12: 14.86
Gilead Sciences, Inc. (NASDAQ:GILD), a biopharmaceutical company based in California, develops and markets treatments for virology, oncology, and other medical conditions across the US, Europe, and worldwide. On March 12, Gilead presented new data on its HIV treatment portfolio and research pipeline at the Conference on Retroviruses and Opportunistic Infections 2025. The findings highlight Gilead’s progress in advancing treatment options, improving patient outcomes, and working toward a potential cure for HIV. Gilead is among the most undervalued stocks to invest in.
Gilead Sciences, Inc. (NASDAQ:GILD) had a strong performance in both the fourth quarter and full year. In 2024, total product sales rose 8% year-over-year to $26.8 billion, with fourth quarter sales climbing 13% to $7.2 billion. HIV sales for the year reached $19.6 billion, exceeding Street expectations. Biktarvy, a leading HIV treatment, saw a 13% rise in sales. Gilead’s HIV business has demonstrated steady growth, with annual increases of 5% in 2022, 6% in 2023, and 8% in 2024, driven by innovation and strong execution. Gilead also returned $5.1 billion to shareholders last year, including $3.9 billion in dividends and $1.2 billion in share buybacks.
As per Insider Monkey’s fourth quarter database, 74 hedge funds were bullish on Gilead Sciences, Inc. (NASDAQ:GILD), an increase from 59 funds in the last quarter. Jim Simons’ Renaissance Technologies held the biggest position in the firm, with 5.3 million shares worth $492.3 million.
8. JD.com, Inc. (NASDAQ:JD)
Number of Hedge Fund Holders: 78
Forward P/E Ratio as of March 12: 9.85
JD.com, Inc. (NASDAQ:JD), a supply chain-driven technology and service provider in China, offers a range of products, including electronics, home appliances, and general merchandise such as food, beverages, and baby products. On March 10, Mizuho raised its price target for JD.com from $43 to $50 and maintained an Outperform rating on the shares. It ranks 8th on our list of the most undervalued NASDAQ stocks.
JD.com, Inc. (NASDAQ:JD) ended 2024 with a 7% year-over-year increase in total revenue, surpassing the growth of overall retail sales and online physical goods. The company also saw steady growth in non-GAAP net profit, with its net margin reaching 4.1%. While continuing to invest in long-term expansion, JD made solid progress toward its profitability goals. In the fourth quarter, most categories and revenue streams experienced strong double-digit growth. Free cash flow for the year rose to RMB 44 billion from RMB 41 billion in 2023, fueled by improved profitability and lower capital expenditures, though partly offset by cash outflows to secure important supplies. By the close of Q4, the company held RMB 241 billion in cash, restricted cash, and short-term investments.
As per Insider Monkey’s fourth quarter database, 78 hedge funds were bullish on JD.com, Inc. (NASDAQ:JD), up from 75 funds in the last quarter.
7. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 79
Forward P/E Ratio as of March 12: 13.89
QUALCOMM Incorporated (NASDAQ:QCOM) develops and commercializes essential wireless technologies globally. The company operates through three segments – Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL), and Qualcomm Strategic Initiatives (QSI). On March 10, Qualcomm announced an agreement to acquire EdgeImpulse Inc to strengthen its AI capabilities for IoT. This move enhances developer tools and supports over 170,000 developers in creating AI-powered applications for edge devices.
In Q1 of fiscal year 2025, QUALCOMM Incorporated (NASDAQ:QCOM) reported record revenue of $11.7 billion, with non-GAAP earnings per share of $3.41. QTL generated $1.5 billion in revenue with a 75% EBT margin, meeting analyst estimates. QCT also set a record with $10.1 billion in revenue. Handset revenue reached $7.6 billion, reflecting 13% year-over-year growth, driven by strong demand for premium Android smartphones and the success of the Snapdragon 8 Elite platform. QCT IoT revenue grew 36% year-over-year to $1.5 billion, fueled by product launches featuring advanced processors and on-device AI across consumer, networking, and industrial applications. QCOM is ranked 7th among the most undervalued stocks to buy.
As per Insider Monkey’s Q4 database, 79 hedge funds were bullish on QUALCOMM Incorporated (NASDAQ:QCOM), an increase from 74 funds in the preceding quarter. John Overdeck and David Siegel’s Two Sigma Advisors was among the largest shareholders of the firm, with 2.6 million shares valued at $402.6 million.
6. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 80
Forward P/E Ratio as of March 12: 8.87
Comcast Corporation (NASDAQ:CMCSA) is one of the most undervalued stocks on our list. It is a Pennsylvania-based media and technology firm that operates across Residential Connectivity & Platforms, Business Services Connectivity, Media, Studios, and Theme Parks segments. On March 11, Comcast announced a free upgrade to Xfinity Internet speeds for over 20 million customers. With this upgrade, upload speeds will increase by 50% to 100%, making it faster to share large files, work remotely, and upload videos to social media.
In 2024, Comcast Corporation (NASDAQ:CMCSA) achieved record revenue of $124 billion and an all-time high adjusted EBITDA of $38 billion. The company also saw a 9% increase in adjusted EPS and generated $12.5 billion in free cash flow, despite facing strong competition and strategic challenges. Total revenue grew by 2% for both the fourth quarter and the full year, driven by steady mid-single-digit growth across primary segments.
Among the hedge funds tracked by Insider Monkey, 80 funds were bullish on Comcast Corporation (NASDAQ:CMCSA) at the end of Q4 2024, compared to 72 funds that invested in the stock in the last quarter. Jean-Marie Eveillard’s First Eagle Investment Management was the biggest stakeholder of the company, with 34.1 million shares worth $1.28 billion.
5. Western Digital Corporation (NASDAQ:WDC)
Number of Hedge Fund Holders: 85
Forward P/E Ratio as of March 12: 5.63
Ranked 5th on our list of the most undervalued stocks is Western Digital Corporation (NASDAQ:WDC), which designs, produces, and distributes data storage devices across the United States, Europe, China, the Middle East, Hong Kong, Africa, and other markets. On March 11, the firm was recognized as one of the World’s Most Ethical Companies for 2025 by Ethisphere, a global leader in promoting ethical business practices. This marks the seventh time Western Digital has received this title, making it one of only five companies recognized in the technology sector.
In the second quarter of fiscal 2025, Western Digital Corporation (NASDAQ:WDC) reported $4.3 billion in revenue, with a non-GAAP gross margin of 35.9% and earnings per share of $1.77. The company’s focus on quality, reliability, and innovation, along with a diverse portfolio, has helped it navigate market shifts effectively. Operating cash flow for the quarter reached $403 million, while free cash flow amounted to $335 million. WDC ended the quarter with $2.3 billion in cash and equivalents, bringing total liquidity to $4.5 billion. Looking ahead, the company expects third quarter revenue to range between $3.75 billion and $3.95 billion.
According to Insider Monkey’s fourth quarter database, 85 hedge funds were bullish on Western Digital Corporation (NASDAQ:WDC), a significant increase from 66 in the previous quarter.
4. PDD Holdings Inc. (NASDAQ:PDD)
Number of Hedge Fund Holders: 85
Forward P/E Ratio as of March 12: 9.26
PDD Holdings Inc. (NASDAQ:PDD) is a multinational commerce group that owns and operates multiple businesses. It runs Pinduoduo, an e-commerce platform offering products across different categories such as fresh produce, clothing, footwear, and childcare essentials. On March 12, PDD Holdings Inc. (NASDAQ:PDD)’s global online marketplace Temu partnered with DigitBridge, an American digital commerce operations system, to support small and medium-sized businesses in expanding their sales channels.
In Q3 2024, PDD Holdings Inc. (NASDAQ:PDD)’s revenue climbed 44% year-over-year to RMB 99.4 billion, fueled by growth in online marketing and transaction services. The company generated RMB 27.5 billion in net cash from operations, down from RMB 32.5 billion in the same period last year. As of September 30, 2024, PDD held RMB 38.5 billion in cash, cash equivalents, and short-term investments. PDD Holdings Inc. (NASDAQ:PDD) is among the most undervalued stocks to purchase.
According to Insider Monkey’s Q4 database, 85 hedge funds were bullish on PDD Holdings Inc. (NASDAQ:PDD), compared to 78 funds in the prior quarter. David Tepper’s Appaloosa Management is one of the biggest shareholders of the company, with 5.3 million shares valued at approximately $519.5 million.
3. United Airlines Holdings, Inc. (NASDAQ:UAL)
Number of Hedge Fund Holders: 86
Forward P/E Ratio as of March 12: 6.44
United Airlines Holdings, Inc. (NASDAQ:UAL) is one of the most undervalued stocks, offering air transportation services across North America, Europe, Asia, the Pacific, Africa, Latin America, and the Middle East, carrying both passengers and cargo through its mainline and regional fleets. On March 7, United Airlines announced the installation of Starlink on its first regional aircraft. Beginning in May, the airline aims to equip over 40 regional aircraft each month, continuing through the end of 2025. This upgrade will provide passengers with high speed, free in-flight Wi-Fi and expanded entertainment options while also simplifying installation, maintenance, and overall operations.
In Q4 2024, United Airlines Holdings, Inc. (NASDAQ:UAL)’s total revenue per available seat mile increased by 1.6% year-over-year, driven by a 6.2% rise in capacity. The Sunday after Thanksgiving became the airline’s highest revenue day, exceeding the previous record by 25%. The company posted record quarterly earnings, with EPS of $3.26 outperforming expectations, and a 9.7% pretax margin, up 3.5 points from the prior year. Strong revenue performance contributed to full-year EPS of $10.61, surpassing market projections. UAL also generated $3.4 billion in free cash flow and reduced its debt by $7.4 billion in 2024.
According to Insider Monkey’s fourth quarter database, 86 hedge funds were bullish on United Airlines Holdings, Inc. (NASDAQ:UAL), in contrast to the previous quarter when 54 funds had invested in the stock.
2. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 94
Forward P/E Ratio as of March 12: 14.10
Placed second on our list of the most undervalued stocks is PayPal Holdings, Inc. (NASDAQ:PYPL). It provides a global digital payments platform for merchants and consumers. On February 24, the company announced that it is bringing its enterprise services under one umbrella with PayPal Open, combining brands like Braintree and Hyperwallet to streamline business payments. With PayPal Open, businesses get easier access to fraud protection, buy now, pay later options, global transactions in 140 currencies, lending solutions, and AI-powered insights, all through a single platform. However, Venmo will stay separate in the United States because of its strong brand recognition.
In 2024, PayPal Holdings, Inc. (NASDAQ:PYPL) saw solid financial and operational growth, driven by improvements in branded checkout, P2P services, and Venmo, along with a stronger pricing strategy. Revenue increased 7% to $32 billion, while total payment volume increased 10% to nearly $1.7 trillion. Non-GAAP earnings per share also grew 21% year-over-year. The company generated $6.8 billion in free cash flow and repurchased $6 billion in shares last year. For 2025, PayPal expects steady growth in transaction margin dollars as well as strong free cash flow.
As per Insider Monkey’s fourth quarter database, 94 hedge funds were bullish on PayPal Holdings, Inc. (NASDAQ:PYPL), up from 90 funds in the prior quarter.
1. Micron Technology, Inc. (NASDAQ:MU)
Number of Hedge Fund Holders: 94
Forward P/E Ratio as of March 12: 12.66
Micron Technology, Inc. (NASDAQ:MU) develops and sells memory and storage products across the US, Asia, Europe, and other markets. It operates through four segments – Compute and Networking, Mobile, Embedded, and Storage. On March 12, Wolfe Research adjusted its price target for MU from $175 to $150 but kept its Outperform rating on the stock.
In the first quarter of fiscal 2025, Micron Technology, Inc. (NASDAQ:MU) reported revenue of $8.71 billion, up from $7.75 billion in the previous quarter and $4.73 billion in the same period last year. The company posted a GAAP net income of $1.87 billion, or $1.67 per diluted share. Operating cash flow stood at $3.24 billion, compared to $3.41 billion in the prior quarter and $1.40 billion a year ago. Capital expenditures for the quarter amounted to $3.13 billion, resulting in adjusted free cash flow of $112 million. By the end of the quarter, Micron held $8.75 billion in cash, marketable investments, and restricted cash.
Among the hedge funds tracked by Insider Monkey in the fourth quarter of 2024, Micron Technology, Inc. (NASDAQ:MU) was part of 94 public stock portfolios, down from 107 in the preceding quarter. D E Shaw was one of the largest stakeholders of the company, with 4.2 million shares worth $353 million.
Overall, Micron Technology, Inc. (NASDAQ:MU) ranks first on our list of the most undervalued NASDAQ stocks to buy. While we acknowledge the potential of MU to grow, our conviction lies in the belief that certain 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 MU 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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