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 Seagate Technology Holdings plc (NASDAQ:STX) 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 technician configuring a network-attached storage drive.
Seagate Technology Holdings plc (NASDAQ:STX)
Forward P/E: 14.10
Number of Hedge Fund Holders: 52
Seagate Technology Holdings plc (NASDAQ:STX) is a data storage and technology company that designs, manufactures, and sells computer hardware. As a leading innovator of mass-capacity data storage, the company offers a comprehensive portfolio of storage devices, systems, and services from edge to cloud. Seagate Technology Holdings plc (NASDAQ:STX) ranks among the top cheap tech stocks to buy according to hedge funds.
The company is focused on enhancing its capabilities and offerings in the data storage industry. In February 2025, Seagate Technology Holdings plc (NASDAQ:STX) announced its agreement to acquire Intevac, a leading provider of thin-film process technology and manufacturing platforms for high-volume manufacturing focused primarily on the hard disk drive (HDD) industry. This transaction is expected to help Seagate Technology Holdings plc (NASDAQ:STX) improve the performance and efficiency of its storage solutions while also increasing the company’s competitive edge through new manufacturing capabilities and technologies that can help differentiate its products in a highly competitive market. The transaction is scheduled to close in late March or early April 2025 and Seagate Technology Holdings plc (NASDAQ:STX) expects this transaction to be accretive to the company’s non-GAAP earnings per share over the long-term with minimal impact on non-GAAP EPS over the short-term.
Overall, STX ranks 10th on our list of the cheap tech stocks to buy according to hedge funds. While we acknowledge the potential of STX 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 STX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.