We recently compiled a list of the 10 Cheap Technology Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where Global Payments Inc. (NYSE:GPN) stands against the other cheap tech stocks.
It seems that technology stocks have had a tough start to 2025. On March 4, 2025, CNBC reported that since President Donald Trump took office in January, the S&P 500 technology sector has dropped 7.5%. Tech stocks have slumped largely due to new tariffs that have set off a trade war and added fuel to the risk-off sentiment on Wall Street.
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Economists had cautioned that tariffs could lead to a rise in inflation and create global economic disruptions. Many leading tech companies assemble and manufacture products outside the US and as a result of the tariffs these companies could see manufacturing costs rise.
Semiconductor stocks have also been hit hard. On March 3, Trump cleared the way for new 25% tariffs on imports from Mexico and Canada and smashed hopes of a potential last-minute deal. According to the US President, there was “no room left” for further negotiations after weeks of talks. Trump also put an additional 10% tariff on Chinese imports.
In response, Canada said it would impose retaliatory tariffs. Mexico said it will be looking to announce a plan on Sunday. China retaliated with tariffs of up to 15% on some US goods. These developments have added to the uncertainty surrounding the tech sector.
The tech sector has experienced a decline due to economic uncertainty and trade tensions and this might present buying opportunities for some investors. Despite current challenges, some tech stocks show strong potential for growth.
Methodology
To compile our list of the 10 cheap tech stocks to buy according to hedge funds, we used the Finviz stock screener and Yahoo Finance. To find cheap tech stocks, we looked for stocks with a forward P/E ratio of less than 20. We sorted our results based on market capitalization and picked the top 25 technology companies trading at under 20 times their forward earnings as of March 3, 2025. Next, we focused on the top 10 cheap tech stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds. Finally, the 10 cheap tech stocks to buy were ranked in ascending order based on the number of hedge funds holding stakes in them as of Q4 2024.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A payment terminal in action with customers apart of the experience.
Global Payments Inc. (NYSE:GPN)
Forward P/E: 8.44
Number of Hedge Fund Holders: 71
Global Payments Inc. (NYSE:GPN) is an American multinational financial technology company that provides payment technology and software solutions to merchants, issuers, and consumers. The company offers innovative payment acceptance and issuer solutions, software solutions for various business models and customer needs, software to automate accounts payables and receivables, and technologies to help businesses manage and pay employees. Global Payments Inc. (NYSE:GPN) operates a diverse business model with worldwide reach across North America, Europe, Asia Pacific, and Latin America. GPN ranks among the top cheap tech stocks to buy.
On February 13, Raymond James analyst John Davis lowered the price target on Global Payments Inc. (NYSE:GPN) from $131 to $122 while keeping an “Outperform” rating. This decision followed mixed Q4 2024 results where adjusted EPS met expectations while revenue came in slightly below estimates. The analyst estimates that Merchant revenue grew 6% organically (FX adjusted), which is consistent with Q3 but slightly underwhelming given the network acceleration. However, Davis highlighted that high-single-digit growth in key sub-segments like POS & Software and Integrated & Embedded was encouraging. Global Payments Inc.’s (NYSE:GPN) initial 2025 outlook projects 5%-6% revenue growth and 10%-11% adjusted EPS growth. Davis believes if management can deliver on the outlook, the stock could rise higher. The analyst also highlighted that Global Payments Inc. (NYSE:GPN) trades at a significant discount to the S&P 500.
Overall, GPN ranks 6th on our list of the cheap tech stocks to buy according to hedge funds. While we acknowledge the potential of GPN as an investment, our conviction lies in the belief that some 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 GPN 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.
Disclosure: None. This article is originally published at Insider Monkey.
