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Uncover 4 Undervalued Tech Giants Before They Skyrocket in 2026
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Key Takeaways
The tech sector outperformed the broader market in 2025, yet several large players remain undervalued.
Improving AI adoption is driving spending across data centers, cloud platforms and enterprise infrastructure.
Semiconductor, networking, and enterprise software demand are key growth pillars heading into 2026.
The technology sector continues to dominate the U.S. stock market, driving exceptional stock performance in 2025. Tech companies across industries witnessed a volatile 2025 owing to growing geopolitical unrest worldwide, supply chain issues and macro headwinds in some regions. However, despite growing energy prices, the overall annual inflation rate in 2025 was lower than expected in US. Moreover, consumer resilience in some end markets and growing capex spending by organizations effectively offset the negative effects.
The Computer and Technology group has surged 27.8% in 2025 so far, outperforming the S&P 500 index’s growth of 20%. The Nasdaq Composite index, where tech stocks account for more than 50%, has rose 21% so far in 2025. Despite this growth, several mega-cap tech stocks continue to trade at a discounted valuation multiple compared to these industries. Based on strong fundamentals, growing AI integration and spending on digital transformation, we have shortlisted four tech stocks that have strong growth potential in 2026. These stocks are Micron Technology (MU - Free Report) , Applied Materials (AMAT - Free Report) , Salesforce (CRM - Free Report) and Cisco Systems (CSCO - Free Report) .
Key Factors
Investment in AI Infrastructure: AI is no longer just an experimental tool in the business world. It has become an essential component for gaining a competitive advantage in the rapidly evolving tech sector. In 2025, the industry witnessed widespread enterprise integration of AI, and in 2026, this trend is expected to accelerate, backed by multiple factors.
From supply chain optimization, warehouse automation, to optimizing product lines, AI is being increasingly deployed by manufacturing sector companies to support these operations. Moreover, the telecommunications industry is also witnessing a surge in AI use cases. Governments worldwide are pushing for network expansion in rural and remote areas to bridge the digital divide and facilitate advanced use cases such as remote healthcare, financial services and other applications.
Telecom service providers are developing AI-powered tools to enhance network management, reduce instances of network outage and enhance customer services. Social ecommerce companies such as Pinterest and META are rapidly incorporating AI models to understand user behavior, predict emerging trends and help content creators better reach their target market.
Along with developing advanced AI products, organizations are also using AI to drive efficiency across their internal processes. Enterprises across sectors such as healthcare, automotive, communication, finance, and retail are increasing their spending on AI infrastructure. This presents a solid growth opportunity for Tech giants with a strong AI native portfolio offering.
Solid Traction in Semiconductor and Data Center Markets: The companies are generating a large pool of information from their day-to-day operations. Competitive edge in today’s digital world depends on real-time analytics of that vast information, which helps organizations to make informed decisions. Hence, businesses worldwide are rushing to develop high-performance computing infrastructure and utilize AI data centers. These AI-driven computing requirements are driving investments in data centers and cloud platforms. Per Grandview Research, the AI data center market is expected to reach $60.49 billion in 2030 from $13.62 billion in 2025, with a compound annual growth rate of 28.3%.
The AI buildouts are also reshaping the semiconductor industry. The AI ecosystem is evolving rapidly. The focus is shifting from training big AI models with a large amount of data to AI inference workloads, that is, actually using the AI models in real time for various tasks. Semiconductor companies are readjusting their strategy to match these requirements.
Key Picks
Idaho-based Micron Technology has established itself as one of the leading providers of semiconductor memory solutions. Micron is strengthening its industry partnerships to capitalize on AI and data center growth. The company is actively engaged in long-term agreements with NVIDIA, AMD and Intel, enabling Micron to capture a larger share of the AI infrastructure market. It is expanding its foothold in the SSD storage market. The emergence of thinner laptops and tablets over the past few years has created ideal market conditions for SSDs, which are now entering the higher end of the market.
Strong customer interest in its leading-edge HBM3E portfolio is expected to drive substantial revenue growth in the quarters ahead. As companies continue to build out GPU clusters and AI data centers that require advanced memory solutions, this presents a solid growth opportunity for Micron.
From a valuation standpoint, Micron trades at a forward price-to-earnings ratio of 12.17, lower than the 17.23 for the Computer - Integrated Systems. With an average broker recommendation (ABR) of 1.351, the stock has gained 240.6% over the past year. Earnings estimate for MU has improved 113.14% for 2026 over the past 60 days. It has a long-term earnings growth expectation of 52.06% and delivered an earnings surprise of 14.35%, on average, in the trailing four quarters. Micron sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Micron Technology, Inc. Price, Consensus and EPS Surprise
Headquartered in Santa Clara, CA, Applied Materials is one of the world’s largest suppliers of equipment for the fabrication of semiconductor, flat panel liquid crystal displays (LCDs), and solar photovoltaic (PV) cells and modules. Applied Materials is at the forefront of artificial intelligence (AI)-driven semiconductor innovations.
It is well-positioned to capitalize on the growing demand for ICAPS (IoT, Communications, Automotive, Power and Sensors) technologies, a market segment experiencing rapid expansion driven by AI, electrification and automation trends. Moreover, the emergence of data centers will continue to be a major contributor to the company's top-line growth, with the growing demand for Dynamic Random Access Memory by the cloud service providers.
From a valuation standpoint, AMAT trades at a forward price-to-earnings ratio of 26.56, lower than the 34.54 for the Electronics - Semiconductors. With an ABR of 1.897, the stock has gained 56.3% over the past year. Earnings estimate for AMAT has improved 6.42% for 2026 over the past 60 days. It has a long-term earnings growth expectation of 10.11% and delivered an earnings surprise of 4.17%, on average, in the trailing four quarters. AMAT carries a Zacks Rank #3 (Hold) at present.
Applied Materials, Inc. Price, Consensus and EPS Surprise
Headquartered in San Francisco, Salesforce, Inc. is the leading provider of on-demand Customer Relationship Management (“CRM”) software, which enables organizations to better manage critical operations, such as sales force automation, customer service and support, marketing automation, document management, analytics and custom application development. The company is steadily expanding its generative AI offerings. The company has recently completed the acquisition of Informatica, adding the company’s AI-powered cloud data management capabilities to the Salesforce platform.
Its ability to provide an integrated solution for customers’ business problems is the key growth driver. With its SaaS-based CRM and social enterprise applications, we think that Salesforce is well-positioned to lead the market.
From a valuation standpoint, Salesforce trades at a forward price-to-sales ratio of 5.47, lower than the 7.58 for the Computer - Software. With an ABR of 1.6, the stock has declined 21.3% over the past year. Earnings estimates for the company have improved 2.22% for 2026 over the past 60 days. It has a long-term earnings growth expectation of 15.04% and delivered an earnings surprise of 6.9%, on average, in the trailing four quarters. Salesforce carries a Zacks Rank #3 (Hold) at present.
Headquartered in San Jose, CA, Cisco offers identity and access, advanced threat, and unified threat management solutions. It is rapidly expanding its presence in the network security domain. Its AI portfolio for data centers with new solutions like the Unified Nexus Dashboard, Cisco Intelligent Packet Flow, configurable AI PODs, and 400G bidirectional (BiDi) optics are expected to gain solid market traction in upcoming quarters.
From a valuation standpoint, Cisco trades at a forward price-to-earnings ratio of 18.48, lower than the 22.87 for the Computer - Networking. With an ABR of 1.854, the stock has increased 30% over the past year. Earnings estimate for CSCO has improved 1.38% for 2026 over the past 60 days. It has a long-term earnings growth expectation of 8.02% and delivered an earnings surprise of 3.22%, on average, in the trailing four quarters. Cisco carries a Zacks Rank #3 at present.
Cisco Systems, Inc. Price, Consensus and EPS Surprise
Image: Bigstock
Uncover 4 Undervalued Tech Giants Before They Skyrocket in 2026
Key Takeaways
The technology sector continues to dominate the U.S. stock market, driving exceptional stock performance in 2025. Tech companies across industries witnessed a volatile 2025 owing to growing geopolitical unrest worldwide, supply chain issues and macro headwinds in some regions. However, despite growing energy prices, the overall annual inflation rate in 2025 was lower than expected in US. Moreover, consumer resilience in some end markets and growing capex spending by organizations effectively offset the negative effects.
The Computer and Technology group has surged 27.8% in 2025 so far, outperforming the S&P 500 index’s growth of 20%. The Nasdaq Composite index, where tech stocks account for more than 50%, has rose 21% so far in 2025. Despite this growth, several mega-cap tech stocks continue to trade at a discounted valuation multiple compared to these industries. Based on strong fundamentals, growing AI integration and spending on digital transformation, we have shortlisted four tech stocks that have strong growth potential in 2026. These stocks are Micron Technology (MU - Free Report) , Applied Materials (AMAT - Free Report) , Salesforce (CRM - Free Report) and Cisco Systems (CSCO - Free Report) .
Key Factors
Investment in AI Infrastructure: AI is no longer just an experimental tool in the business world. It has become an essential component for gaining a competitive advantage in the rapidly evolving tech sector. In 2025, the industry witnessed widespread enterprise integration of AI, and in 2026, this trend is expected to accelerate, backed by multiple factors.
From supply chain optimization, warehouse automation, to optimizing product lines, AI is being increasingly deployed by manufacturing sector companies to support these operations. Moreover, the telecommunications industry is also witnessing a surge in AI use cases. Governments worldwide are pushing for network expansion in rural and remote areas to bridge the digital divide and facilitate advanced use cases such as remote healthcare, financial services and other applications.
Telecom service providers are developing AI-powered tools to enhance network management, reduce instances of network outage and enhance customer services. Social ecommerce companies such as Pinterest and META are rapidly incorporating AI models to understand user behavior, predict emerging trends and help content creators better reach their target market.
Along with developing advanced AI products, organizations are also using AI to drive efficiency across their internal processes. Enterprises across sectors such as healthcare, automotive, communication, finance, and retail are increasing their spending on AI infrastructure. This presents a solid growth opportunity for Tech giants with a strong AI native portfolio offering.
Solid Traction in Semiconductor and Data Center Markets: The companies are generating a large pool of information from their day-to-day operations. Competitive edge in today’s digital world depends on real-time analytics of that vast information, which helps organizations to make informed decisions. Hence, businesses worldwide are rushing to develop high-performance computing infrastructure and utilize AI data centers. These AI-driven computing requirements are driving investments in data centers and cloud platforms. Per Grandview Research, the AI data center market is expected to reach $60.49 billion in 2030 from $13.62 billion in 2025, with a compound annual growth rate of 28.3%.
The AI buildouts are also reshaping the semiconductor industry. The AI ecosystem is evolving rapidly. The focus is shifting from training big AI models with a large amount of data to AI inference workloads, that is, actually using the AI models in real time for various tasks. Semiconductor companies are readjusting their strategy to match these requirements.
Key Picks
Idaho-based Micron Technology has established itself as one of the leading providers of semiconductor memory solutions. Micron is strengthening its industry partnerships to capitalize on AI and data center growth. The company is actively engaged in long-term agreements with NVIDIA, AMD and Intel, enabling Micron to capture a larger share of the AI infrastructure market. It is expanding its foothold in the SSD storage market. The emergence of thinner laptops and tablets over the past few years has created ideal market conditions for SSDs, which are now entering the higher end of the market.
Strong customer interest in its leading-edge HBM3E portfolio is expected to drive substantial revenue growth in the quarters ahead. As companies continue to build out GPU clusters and AI data centers that require advanced memory solutions, this presents a solid growth opportunity for Micron.
From a valuation standpoint, Micron trades at a forward price-to-earnings ratio of 12.17, lower than the 17.23 for the Computer - Integrated Systems. With an average broker recommendation (ABR) of 1.351, the stock has gained 240.6% over the past year. Earnings estimate for MU has improved 113.14% for 2026 over the past 60 days. It has a long-term earnings growth expectation of 52.06% and delivered an earnings surprise of 14.35%, on average, in the trailing four quarters. Micron sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Micron Technology, Inc. Price, Consensus and EPS Surprise
Micron Technology, Inc. price-consensus-eps-surprise-chart | Micron Technology, Inc. Quote
Headquartered in Santa Clara, CA, Applied Materials is one of the world’s largest suppliers of equipment for the fabrication of semiconductor, flat panel liquid crystal displays (LCDs), and solar photovoltaic (PV) cells and modules. Applied Materials is at the forefront of artificial intelligence (AI)-driven semiconductor innovations.
It is well-positioned to capitalize on the growing demand for ICAPS (IoT, Communications, Automotive, Power and Sensors) technologies, a market segment experiencing rapid expansion driven by AI, electrification and automation trends. Moreover, the emergence of data centers will continue to be a major contributor to the company's top-line growth, with the growing demand for Dynamic Random Access Memory by the cloud service providers.
From a valuation standpoint, AMAT trades at a forward price-to-earnings ratio of 26.56, lower than the 34.54 for the Electronics - Semiconductors. With an ABR of 1.897, the stock has gained 56.3% over the past year. Earnings estimate for AMAT has improved 6.42% for 2026 over the past 60 days. It has a long-term earnings growth expectation of 10.11% and delivered an earnings surprise of 4.17%, on average, in the trailing four quarters. AMAT carries a Zacks Rank #3 (Hold) at present.
Applied Materials, Inc. Price, Consensus and EPS Surprise
Applied Materials, Inc. price-consensus-eps-surprise-chart | Applied Materials, Inc. Quote
Headquartered in San Francisco, Salesforce, Inc. is the leading provider of on-demand Customer Relationship Management (“CRM”) software, which enables organizations to better manage critical operations, such as sales force automation, customer service and support, marketing automation, document management, analytics and custom application development. The company is steadily expanding its generative AI offerings. The company has recently completed the acquisition of Informatica, adding the company’s AI-powered cloud data management capabilities to the Salesforce platform.
Its ability to provide an integrated solution for customers’ business problems is the key growth driver. With its SaaS-based CRM and social enterprise applications, we think that Salesforce is well-positioned to lead the market.
From a valuation standpoint, Salesforce trades at a forward price-to-sales ratio of 5.47, lower than the 7.58 for the Computer - Software. With an ABR of 1.6, the stock has declined 21.3% over the past year. Earnings estimates for the company have improved 2.22% for 2026 over the past 60 days. It has a long-term earnings growth expectation of 15.04% and delivered an earnings surprise of 6.9%, on average, in the trailing four quarters. Salesforce carries a Zacks Rank #3 (Hold) at present.
Salesforce Inc. Price, Consensus and EPS Surprise
Salesforce Inc. price-consensus-eps-surprise-chart | Salesforce Inc. Quote
Headquartered in San Jose, CA, Cisco offers identity and access, advanced threat, and unified threat management solutions. It is rapidly expanding its presence in the network security domain. Its AI portfolio for data centers with new solutions like the Unified Nexus Dashboard, Cisco Intelligent Packet Flow, configurable AI PODs, and 400G bidirectional (BiDi) optics are expected to gain solid market traction in upcoming quarters.
From a valuation standpoint, Cisco trades at a forward price-to-earnings ratio of 18.48, lower than the 22.87 for the Computer - Networking. With an ABR of 1.854, the stock has increased 30% over the past year. Earnings estimate for CSCO has improved 1.38% for 2026 over the past 60 days. It has a long-term earnings growth expectation of 8.02% and delivered an earnings surprise of 3.22%, on average, in the trailing four quarters. Cisco carries a Zacks Rank #3 at present.
Cisco Systems, Inc. Price, Consensus and EPS Surprise
Cisco Systems, Inc. price-consensus-eps-surprise-chart | Cisco Systems, Inc. Quote