The S&P 500 is up about 32% in the past year as of March 27, and the technology sector has led the charge. The Technology Select Sector SPDR (ticker: XLK) exchange-traded fund is up 45.3% in the same period, but a small number of high-quality tech stocks haven’t participated in the rally.
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If you have missed out on the tech stock rally, are looking to rebalance your tech stock portfolio or are simply hunting for opportunities to buy the dip in overlooked tech stocks, here are seven tech stocks to buy that are down at least 10% in the past year, according to Morningstar:
| Stock | Implied upside over March 27 closing price |
| Nokia Corp. (NOK) | 66.7% |
| First Solar Inc. (FSLR) | 10.5% |
| Smartsheet Inc. (SMAR) | 45.8% |
| Endava PLC (DAVA) | 63.9% |
| Fastly Inc. (FSLY) | 58.4% |
| BlackBerry Ltd. (BB) | 78.2% |
| GDS Holdings Ltd. (GDS) | 358.1% |
Nokia Corp. (NOK)
Nokia is a telecom equipment and digital map data vendor that also licenses intellectual property to third parties. Nokia shares are down 18.8% in the past year, but analyst Matthew Dolgin says Nokia’s poor performance has set a low bar of expectations in 2024. Management expects a sales rebound in the second half of the year, and Dolgin says even a normalized performance from the company this year could be enough to produce significant upside given the stock’s large net cash position and low valuation. Morningstar has a “buy” rating and $6 fair value estimate for NOK stock, which closed at $3.60 on March 27.
First Solar Inc. (FSLR)
First Solar produces solar modules using a proprietary thin film semiconductor technology. First Solar’s stock is down 20.3% in the past 12 months, but analyst Brett Castelli says solar panel production should grow 40% in 2024 as the company generates an estimated $1 billion in domestic manufacturing credits. As a result, Castelli projects earnings per share will grow 75% year over year in 2024 to $14. Given his 2024 outlook, Castrelli says First Solar shares are attractively valued at only 12.3 times earnings. Morningstar has a “buy” rating and $185 fair value estimate for FSLR stock, which closed at $167.45 on March 27.
Smartsheet Inc. (SMAR)
Smartsheet is a cloud-based platform that allows organizations and teams to plan, automate, manage and report on work on a large scale. Smartsheet shares are down 17.6% in the past year, but analyst Emma Williams says the company’s traction in the sticky enterprise market became clear when it reached a milestone $1 billion in annual recurring revenue in the fourth quarter of 2023. Williams says Smartsheet is a quality software stock trading at a sizable discount, and investors have overreacted to near-term macroeconomic headwinds. Morningstar has a “buy” rating and $56 fair value estimate for SMAR stock, which closed at $38.40 on March 27.
Endava PLC (DAVA)
Endava provides engineering and consulting services to global payments, media and telecom clients. The stock is down 42.2% over the past 12 months, and analyst Rob Hales says much of that weakness occurred after the company issued weak guidance and announced the acquisition of GalaxE Solutions in February 2024. Hales says the recent sell-off is an overreaction, and investors willing to ride out near-term headwinds will be rewarded with a cyclical recovery in 2025 and a five-year compound annual growth rate of 8.9% (excluding GalaxE). Morningstar has a “buy” rating and $62 fair value estimate for DAVA stock, which closed at $37.83 on March 27.
Fastly Inc. (FSLY)
Fastly is a U.S. cloud computing services provider that specializes in helping developers extend core cloud infrastructure to the edges of their networks. Fastly shares are down 22.9% in the past year, but Dolgin says its fundamental performance hasn’t been nearly as bad as its stock price history suggests. The company’s full-year 2024 guidance implies 15% revenue growth, and Dolgin says Fastly’s 31 new enterprise customer additions in the fourth quarter is its biggest jump in nearly three years. In addition, he expects further gross margin expansion. Morningstar has a “buy” rating and $20 fair value estimate for FSLY stock, which closed at $12.63 on March 27.
BlackBerry Ltd. (BB)
BlackBerry has undergone a painful transition away from its legacy smartphone business and toward enterprise security and software. The stock is down 29.7% in the past 12 months, but analyst William Kerwin says he is bullish on the company’s focus on cash flow and profitability as it aims to restructure its business and cut costs to improve margins. Kerwin is more optimistic about BlackBerry’s smart device business than its cybersecurity business, but he sees the stock as significantly undervalued for investors who have high risk tolerance. Morningstar has a “buy” rating and $4.90 fair value estimate for BB stock, which closed at $2.75 on March 27.
GDS Holdings Ltd. (GDS)
GDS is the largest carrier-neutral data center operator in China by revenue. The company’s facilities operate primarily in Beijing, Shanghai and other major Chinese cities. The stock is down 66.1% in the past year as China has not seen the same level of artificial intelligence-driven data center demand as the U.S., but analyst Dan Baker says GDS’ current share price reflects an overly pessimistic outlook. Baker says the profitability of the company’s mature data centers has been masked by the costs associated with its rapid expansion. Morningstar has a “buy” rating and $29 fair value estimate for GDS stock, which closed at $6.33 on March 27.
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7 Oversold Tech Stocks to Buy originally appeared on usnews.com
Update 03/28/24: This story was previously published at an earlier date and has been updated with new information.
