Four Undervalued Tech Stocks Positioned to Rally in 2026

The technology sector continues to drive market returns as artificial intelligence and data center infrastructure investments reshape the industry landscape. While many mega-cap tech companies have benefited significantly from these trends, several high-quality undervalued tech stocks trading at attractive valuations remain overlooked by mainstream investors. These firms combine strong fundamentals with exposure to multi-year growth catalysts, positioning them for potential outperformance in 2026.

The Computer and Technology group surged 27.8% during 2025, outpacing the S&P 500’s 20% gain. The Nasdaq Composite, where tech holdings represent over 50% of the index, climbed 21% for the year. Despite this robust performance, select technology leaders continue to trade at valuations below their historical averages and industry peers, creating compelling opportunities for investors seeking both growth and value.

Why These Tech Giants Trade Below Their Potential

The technology landscape entering 2026 is characterized by unprecedented investment in artificial intelligence infrastructure and digital transformation initiatives. Large-scale enterprise adoption of AI has accelerated rapidly, yet valuations for certain key semiconductor, software, and infrastructure providers remain compressed relative to their long-term growth prospects.

Undervalued tech stocks in this environment share common characteristics: exposure to the AI buildout cycle, strong customer relationships with major data center operators, and improving earnings trajectories that haven’t yet been fully reflected in share prices. The convergence of these factors creates a window for value-conscious investors to gain entry into companies positioned at the epicenter of the industry’s evolution.

AI and Data Center Infrastructure: The Primary Growth Catalyst

Investment in AI infrastructure has transcended experimental phases to become a business imperative. Manufacturing, telecommunications, healthcare, financial services, and retail sectors are all ramping spending on AI capabilities and data center buildout. This secular trend is expected to accelerate throughout 2026.

Telecom service providers worldwide are rolling out AI-powered network management solutions to improve service reliability and customer experience while expanding coverage to underserved regions. Ecommerce and social media platforms are deploying AI models to enhance content personalization and creator monetization. Enterprises across sectors are simultaneously leveraging AI to drive operational efficiency and competitive advantage.

The global AI data center market exemplifies the scale of opportunity ahead. Market research from Grandview Research projects this sector will expand from $13.62 billion in 2025 to $60.49 billion by 2030, representing a 28.3% compound annual growth rate. This explosive growth directly benefits semiconductor manufacturers, equipment suppliers, and infrastructure software providers—precisely the companies featured among our undervalued tech stock selections.

Semiconductor Innovation and Memory Demand Reshaping the Industry

The semiconductor ecosystem is undergoing fundamental transition. The industry focus is shifting from developing massive AI training models toward AI inference applications—deploying trained models to solve real-world problems at scale. This inflection reshapes semiconductor companies’ product roadmaps and presents new growth vectors.

High-performance computing requirements drive continuous investments in advanced data center hardware and memory solutions. Competitive advantage in this digital era hinges on real-time analytics capabilities, compelling organizations to build out sophisticated computing infrastructure. Semiconductor companies capturing share in memory, storage, and networking solutions are well-positioned to benefit from this multiyear investment cycle.

Our Top Undervalued Tech Stock Selections

Micron Technology: Capitalizing on Advanced Memory Demand

Idaho-based Micron Technology stands as a leading provider of semiconductor memory and storage solutions. The company has secured long-term supply agreements with major chip designers including NVIDIA, AMD, and Intel, providing revenue visibility and enabling Micron to capture significant share of the AI infrastructure market expansion.

Micron’s HBM3E (high-bandwidth memory) portfolio is gaining substantial customer traction as companies construct GPU clusters and AI data centers requiring cutting-edge memory solutions. The company is simultaneously expanding its solid-state drive (SSD) business, benefiting from the shift toward thinner computing devices and enterprise storage consolidation.

From a valuation perspective, Micron trades at a forward price-to-earnings multiple of 12.17x, notably below the 17.23x for the broader Computer Integrated Systems industry group—indicating the stock trades at a discount despite superior growth prospects. Analyst consensus remains constructive, with an average broker rating of 1.35, and the stock has appreciated 240.6% over the trailing twelve months. Earnings estimates for 2026 have improved 113.14% over the past two months, reflecting accelerating business momentum.

Applied Materials: Positioning for ICAPS and AI Buildout

Santa Clara-based Applied Materials ranks among the world’s largest suppliers of semiconductor manufacturing equipment, flat-panel LCD production systems, and solar photovoltaic manufacturing solutions. The company sits at the forefront of AI-driven semiconductor innovation and benefits directly from the rapid expansion of ICAPS (IoT, Communications, Automotive, Power, and Sensors) technologies.

Data center expansion continues serving as a significant driver for the company’s revenue growth, as cloud service providers accelerate investment in Dynamic Random Access Memory and other advanced components. Applied Materials’ strategic positioning across the entire semiconductor supply chain creates multiple vectors for participating in the AI infrastructure buildup.

Valuation metrics remain attractive: Applied Materials trades at a 26.56x forward P/E ratio, below the 34.54x multiple for the Electronics-Semiconductors group. With an average analyst rating of 1.90, the stock gained 56.3% over the past year. The company’s long-term earnings growth expectation stands at 10.11% annually, with 2026 earnings estimates improving 6.42% in recent months—evidence that business conditions are strengthening.

Salesforce: Enterprise AI and Platform Consolidation

San Francisco-headquartered Salesforce leads the customer relationship management software market, enabling organizations to automate sales, service, marketing, analytics, and custom application workflows. The company is steadily expanding its generative AI capabilities through both organic development and strategic acquisitions.

The recent acquisition of Informatica brings AI-powered data management capabilities onto the Salesforce platform, strengthening the company’s ability to deliver comprehensive solutions addressing multiple customer pain points. This platform consolidation creates switching costs and drives customer lifetime value expansion—classic attributes of undervalued software companies during early-stage AI transitions.

On a forward price-to-sales basis, Salesforce trades at 5.47x, below the 7.58x for the broader Computer-Software group. The stock has declined 21.3% over the past year—an idiosyncratic pullback despite improving fundamentals. At present, Salesforce carries analyst consensus for 15.04% long-term earnings growth, with 2026 estimates improving 2.22% recently. This combination of near-term valuation underperformance with accelerating business trajectory represents a classic undervalued tech stock setup.

Cisco Systems: Network Security and Data Center Innovation

San Jose-based Cisco provides identity, access management, threat detection, and unified security solutions while rapidly expanding its data center networking portfolio. The company’s artificial intelligence initiatives—including new platforms like Unified Nexus Dashboard, Intelligent Packet Flow analytics, configurable AI infrastructure pods, and 400G bidirectional optical networking—are positioning the company to capture share of the expanding data center market.

Cisco trades at an 18.48x forward P/E ratio, discount to the 22.87x multiple for the Computer-Networking industry segment. The stock appreciated 30% over the past twelve months, yet remains reasonably valued relative to long-term growth expectations. With average analyst ratings of 1.85 and long-term earnings growth expectations of 8.02%, Cisco exemplifies an undervalued tech company with meaningful leverage to AI infrastructure expansion.

Investment Outlook for 2026

The combination of aggressive AI infrastructure spending, semiconductor industry innovation, and select company valuations trading below intrinsic value suggests 2026 could reward investors with patience to identify and own undervalued tech stocks. The companies profiled above—Micron Technology, Applied Materials, Salesforce, and Cisco Systems—represent different angles on the technology sector’s secular growth trajectory.

Success in technology markets requires disciplined valuation discipline and conviction to hold contrary positions when valuations appear disconnected from fundamentals. These undervalued tech stocks offer precisely this combination for investors prepared to commit capital for the long term.