Four Undervalued Tech Stocks Poised for Growth in 2026

The technology sector continues to be a cornerstone of market performance, with significant opportunities hiding in plain sight. While mega-cap tech companies have attracted substantial investor attention in 2025, several undervalued stock picks remain underappreciated despite strong fundamentals. These overlooked players are well-positioned to benefit from accelerating AI adoption and data center expansion in 2026. Based on robust business foundations, rapid AI deployment, and digital transformation investments, we’ve identified four technology leaders trading at attractive valuations: Micron Technology [MU], Applied Materials [AMAT], Salesforce [CRM], and Cisco Systems [CSCO].

Why These Tech Stocks Remain Discounted

The tech sector’s overall surge of 27.8% during 2025 has overshadowed individual company narratives. Despite outperforming the S&P 500 index’s 20% gain, many semiconductor and software leaders continue trading below their intrinsic value. The Nasdaq Composite, where tech stocks dominate with over 50% representation, has climbed 21% year-to-date, yet pockets of genuine undervalued stock opportunities persist within the sector.

Several factors contribute to this valuation disconnect. Geopolitical tensions, supply chain volatility, and regional macro challenges created headwinds throughout 2025. Additionally, investor focus has concentrated on a narrow band of mega-cap names, leaving solid performers undervalued in relative terms. However, moderating inflation pressures, resilient consumer demand in key markets, and accelerating enterprise spending on digital infrastructure have provided strong support for the underlying business fundamentals of these companies.

AI and Data Center Boom: The Growth Catalysts

Artificial intelligence has evolved from experimental technology to essential business infrastructure. In 2026, enterprise AI adoption is accelerating rapidly across multiple industries and use cases. Manufacturing companies deploy AI for supply chain optimization, warehouse automation, and production line refinement. Telecommunications providers are rolling out AI-powered network management tools to reduce outages and enhance customer experiences. Social commerce platforms including Pinterest and META leverage advanced AI models to understand user preferences, anticipate market trends, and empower content creators with better targeting capabilities.

Beyond customer-facing applications, enterprises across healthcare, automotive, communications, finance, and retail sectors are ramping up AI infrastructure investments. This creates substantial tailwinds for technology companies with AI-native product portfolios.

The shift in semiconductor focus presents another significant opportunity. The industry is transitioning from training large language models with massive datasets toward AI inference—actually deploying trained models for real-time applications. This strategic pivot is reshaping demand patterns and creating growth opportunities for well-positioned suppliers.

The data center transformation underscores this momentum. Organizations increasingly require high-performance computing infrastructure to handle real-time analytics and power AI deployments. The AI data center market is projected to expand from $13.62 billion in 2025 to $60.49 billion by 2030, representing a 28.3% compound annual growth rate, according to Grandview Research. This explosive growth trajectory provides compelling reasons why undervalued stock positions in supporting technology firms deserve investor attention.

Valuation Metrics Show Hidden Potential

Each of our four picks demonstrates attractive valuation metrics relative to sector peers, making them genuinely undervalued stock opportunities:

Micron trades at a forward P/E of 12.17, significantly below the 17.23 average for the Computer-Integrated Systems peer group. Applied Materials’ 26.56 P/E remains below the 34.54 sector benchmark for Electronics-Semiconductors companies. Salesforce’s forward price-to-sales ratio of 5.47 represents a discount to the 7.58 Computer-Software group average. Cisco’s 18.48 P/E compares favorably to the 22.87 Computer-Networking benchmark.

These undervalued stock positions offer compelling entry points for investors seeking exposure to critical technology trends.

Micron Technology: Leading the AI Memory Revolution

Idaho-based Micron Technology has established industry leadership in semiconductor memory solutions. The company is aggressively capitalizing on AI infrastructure growth through strategic partnerships with NVIDIA, AMD, and Intel. These long-term agreements position Micron to capture expanded market share in the AI computing ecosystem.

The company’s SSD storage business is benefiting from the proliferation of thin-form-factor laptops and tablets. High customer enthusiasm for Micron’s leading-edge HBM3E memory portfolio is expected to drive substantial revenue expansion as organizations build out GPU clusters and advanced data centers requiring cutting-edge memory architectures.

Micron’s valuation story underscores the undervalued stock thesis. With earnings estimates improving 113.14% for 2026 over the past two months, the stock carries strong momentum. The company sports a long-term earnings growth expectation of 52.06% and has delivered an average earnings surprise of 14.35% across the trailing four quarters. Zacks currently assigns Micron a #1 Strong Buy ranking, reflecting analyst confidence in the company’s trajectory.

Applied Materials: Positioned for Semiconductor Leadership

Applied Materials, headquartered in Santa Clara, stands among the world’s largest suppliers of semiconductor fabrication equipment, flat panel LCD systems, and solar photovoltaic manufacturing equipment. The company is strategically positioned to capitalize on AI-driven semiconductor innovation and emerging demand for ICAPS technologies (IoT, Communications, Automotive, Power, and Sensors).

Data center expansion represents a major growth avenue, with cloud service providers accelerating Dynamic RAM procurement to support AI workloads and cloud computing services. Applied Materials’ advanced equipment capabilities position the company to benefit from this infrastructure build-out. Despite recent analyst commentary questioning near-term growth, the company’s exposure to critical secular trends makes it a compelling undervalued stock opportunity.

With an average broker recommendation of 1.897 and a Zacks Rank #3 (Hold), Applied Materials offers a more measured valuation proposition than Micron, but one still attractive for patient investors. The company’s 56.3% return over the past year and improving 6.42% 2026 earnings estimates suggest recognition of underlying strengths.

Salesforce: Enterprise AI Expansion Strategy

San Francisco-based Salesforce, the leading provider of on-demand CRM software, is methodically expanding its generative AI capabilities. The company’s recent acquisition of Informatica adds AI-powered cloud data management functionality to the Salesforce platform, strengthening the company’s ability to offer comprehensive, integrated solutions to enterprise customers.

Salesforce’s strength lies in its ability to bundle SaaS-based CRM and social enterprise applications into cohesive platforms addressing complex business challenges. The stock has declined 21.3% over the past year, presenting a compelling undervalued stock entry point for investors with a multi-year time horizon. The 2.22% improvement in 2026 earnings estimates combined with a robust 15.04% long-term earnings growth expectation suggests the market has underappreciated the company’s strategic positioning.

Cisco: Security and Data Center Innovation

San Jose-based Cisco offers comprehensive identity and access management, advanced threat detection, and unified threat management solutions. The company is rapidly expanding its network security capabilities while simultaneously building out an AI-focused data center portfolio.

Cisco’s emerging AI solutions—including the Unified Nexus Dashboard, Intelligent Packet Flow capabilities, configurable AI pods, and 400G bidirectional optics—position the company for solid market adoption in the coming quarters. These innovations address critical data center and network security requirements as organizations accelerate digital infrastructure investments.

With a 30% return over the past year and forward P/E of 18.48 trading below the 22.87 Computer-Networking group average, Cisco represents another solid undervalued stock candidate. The company’s 8.02% long-term earnings growth expectation and 1.38% improvement in 2026 estimates reflect moderate but steady expectations for continued value creation.

The Undervalued Stock Opportunity

The technology sector’s 2026 narrative will be shaped by AI adoption acceleration and data center proliferation. The four companies highlighted above represent undervalued stock opportunities positioned squarely within these transformative trends. Each brings distinct competitive advantages—whether memory leadership, fabrication equipment expertise, enterprise software capabilities, or network infrastructure innovation.

Investors seeking exposure to critical technology trends while paying below-market valuations should carefully evaluate these undervalued stock opportunities. The convergence of strong business fundamentals, industry tailwinds, and attractive valuations creates a compelling investment case for disciplined portfolio construction in 2026.