Recently, I shared a list highlighting some overlooked tech stocks worth considering. In this piece, we’ll see how HP Inc. (NYSE: HPQ) measures up against other lesser-known tech companies that might be good buys right now.
After navigating significant economic challenges, the IT sector has begun 2025 with renewed vigor. This high-tech sector is gearing up for recovery following a rocky period marked by high inflation and increasing interest rates. According to a survey by Deloitte, 62% of tech executives believe the sector will be “healthy” or even “very healthy” in 2025. Global IT spending is projected to grow by 9.3%, driven mainly by significant boosts in software and data center investments. With businesses transitioning their AI initiatives from pilot stages to full implementations, analysts anticipate that AI, cybersecurity, and cloud services will lead the growth.
In 2024, layoffs have slowed down significantly, which is a relief, although new challenges are cropping up—especially with geopolitical tensions and regulatory issues. Current global economic conditions are already influenced by President Trump’s extensive tariff plans, which impose additional costs on key tech-manufacturing nations like Taiwan and Vietnam, ranging from 26% to 49%. While imports of semiconductors integral to AI development are currently exempt, tech firms still face heightened risks due to unstable trade policies.
On the flip side, Generated AI is proving to be somewhat of a double-edged sword. It’s projected to contribute 21% to GDP by 2030, according to the World Economic Forum. However, there are growing worries about job losses, particularly in administrative roles due to these advancements. The World Economic Forum emphasizes that rather than halting AI innovation, there should be a focus on enhancing “real intelligence,” which combines human critical thinking with AI’s capabilities to foster economic growth.
Moreover, as AI becomes more prevalent, cybersecurity is now a top priority. As the use of AI expands, so does the potential for cyberattacks. By 2028, global spending on cybersecurity is expected to surpass $200 billion, as companies prioritize their defenses. Yet, only 24% of current GEN AI projects are deemed sufficiently secure, indicating that widespread trust in AI continues to be a significant challenge.
In summary, despite the IT industry’s strong commitment to generative AI and cloud migration, 2025 will still have to navigate a complex landscape of ethical, geopolitical, and legal hurdles. The companies that succeed will be those that can balance bold innovation with prudent risk management, diversify their supply chains, and prioritize trust with stakeholders.
Considering this dynamic environment, it might be wise to look into those overlooked high-tech stocks now. They could present appealing upside opportunities for investors who wish to go beyond the well-known mega-cap companies.
To identify these overlooked tech stocks, we focused on companies with market caps over $5 billion and a solid financial footing. Using the P/E ratio as a traditional valuation tool, we selected firms with a P/E ratio below 15, which points to relatively affordable, revenue-driven prospects. Our evaluation included hedge fund sentiment and data from Insider Monkey’s fourth quarter 2024 report, resulting in a selection of ten companies that have received less attention from hedge fund investors.
Why are hedge funds keen on these stocks? It’s straightforward. Research indicates that mimicking the top picks from leading hedge funds can lead to market outperformance. The strategy for our quarterly newsletter has involved selecting 14 small and large caps each quarter, achieving a remarkable 373.4% return since May 2014, which significantly surpasses the benchmark.
HP Inc. (NYSE: HPQ) is a major player in personal computing, printing, and hybrid work solutions, operating in three segments: personal systems, printing, and corporate investment. Founded in 1939 and based in Palo Alto, California, it offers a wide array of products including desktops, notebooks, workstations, and industrial printing solutions.
In the first quarter of 2025, HP reported a 2% year-over-year sales increase, with non-GAAP EPS at $0.74, slightly above expectations. The focus on AI-driven computing is being positioned as a core growth area. HP is investing in strategic innovations to enhance AI capabilities across its product line.
Additionally, HP has entered into a long-term partnership to develop AI-powered video conferencing technology, aiming to deliver secure and efficient AI computing experiences. At CES 2025, HP showcased new AI-enhanced devices, highlighting its commitment to innovation in this space.
Even with geopolitical tensions and tariffs impacting supply chains, HP remains resilient, buoyed by the rollout of Windows 11 and increased AI PC adoption, expecting profitability improvements in the latter half of FY2025. With strong cash flow predictions and a commitment to shareholder returns, HP stands out as an often overlooked tech stock with promising long-term growth prospects.
In conclusion, HPQ ranks 7th on our list of overlooked high-tech stocks. While we recognize HPQ’s potential, some AI stocks may offer quicker and higher returns. Since early 2025, certain AI stocks have risen markedly, whereas some popular AI stocks have dipped by about 25%. If you’re in search of promising AI stocks trading below 5x revenue, have a look at our report on the cheapest AI stocks.
