We recently released a list of 10 Underrated Tech Stocks Worth Considering Today In this piece, we will examine how Arrow Electronics, Inc. (NYSE:ARW) measures up against other under-the-radar tech stocks worth considering for investment right now.
After overcoming major macroeconomic challenges, the IT sector has started 2025 with fresh vigor. The tech sector is now ready for a resurgence after a period of instability characterized by high inflation, rising interest rates, and worldwide unpredictability. The sector is expected to be “healthy” or “very healthy” in 2025, according to 62% of tech executives polled by Deloitte. Global IT spending is expected to increase by 9.3%, driven mostly by double-digit growth in software and data center investments. As companies move AI initiatives from pilot projects to full-scale production deployments, analysts anticipate that generative AI, cybersecurity, and cloud services will continue to be important growth drivers.
In 2024, the number of job cuts decreased considerably, signaling increasing steadiness. However, fresh challenges have emerged, particularly due to geopolitical strains and regulatory hurdles. The global economy is now experiencing the impacts of President Trump’s broad-ranging tariff policies, which impose extra fees ranging between 26% and 49% on key technology-manufacturing nations such as Taiwan, India, and Vietnam. While semiconductor imports critical for AI advancement have received temporary exemptions, technology firms depending on worldwide supply lines confront new vulnerabilities because of the fluctuating trade environment.
Meanwhile, generative AI is proving to be a double-edged sword. While it is projected to contribute 21% to U.S. GDP by 2030, as reported by the World Economic Forum, There are increasing worries regarding how this technology might replace millions of jobs, especially those in administrative positions. As the World Economic Forum The key point is that the answer doesn’t involve stopping AI development; instead, it calls for promoting "Genuine Intelligence." This strategy underscores combining human critical analysis with AI functionalities to guarantee broad-based economic progress.
Moreover, cybersecurity has risen to prominence on the strategic agenda. With the growing adoption of AI technologies, the potential vulnerabilities for cyberattacks also expand. It is projected that by 2028, worldwide expenditure on cybersecurity will surpass $200 billion, reflecting businesses' focus on strengthening protective measures. Nevertheless, merely 24% of current generative AI initiatives are believed to have adequate security protocols, suggesting that confidence remains a key barrier to broader AI implementation.
In summary, despite the fact that 2025 holds great promise for the IT industry due to advancements in generative AI, cloud migration, and robust IT investment, businesses still have to deal with a complex web of ethical, geopolitical, and legal issues. Successful companies will strike a balance between daring technological innovation, careful risk management, strategic supply chain diversity, and a dedication to upholding stakeholder and customer confidence.
In light of this ever-changing landscape, we'll explore 10 Underrated Technology Stocks to Consider Purchasing Today. These stocks are well-positioned to take advantage of future prospects and could offer significant growth potential for investors looking past the typical large-market leaders.
Methodology
To find overlooked tech stocks, we started by looking for companies with a market capitalization greater than $5 billion, ensuring a concentration on financially strong, large-cap enterprises. We chose stocks from this category that had a price-to-earnings (P/E) ratio of less than 15, using the P/E ratio as a conventional valuation indicator to highlight relatively affordable earnings-driven stocks. We then evaluated these firms based on hedge fund sentiment, utilizing data from Insider Monkey’s fourth quarter 2024 report. Finally, we chose the ten companies with the least number of hedge fund investors to represent our list of Overlooked Tech Stocks to Buy Now.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points ( see more details here ).
A close-up view of a technician soldering a circuit board in an electronics manufacturing facility.
Arrow Electronics, Inc. (NYSE: ARW )
P/E Ratio: 14.84
Hedge Fund Holders: 35
Arrow Electronics, Inc. (NYSE:ARW) is a prominent player in the technology industry, providing thousands of industrial and commercial customers with critical electrical components and business computer solutions. Arrow’s Global Components and Global Enterprise Computing Solutions (ECS) segments operate in the Americas, EMEA, and Asia-Pacific, powering industries ranging from aerospace and energy to cloud and AI infrastructure.
This neglected technology stock recently demonstrated its resilience with impressive fourth-quarter 2024 results. Arrow Electronics, Inc. (NYSE:ARW) exceeded expectations in the quarter ended December 31, 2024, with sales of $7.3 billion and non-GAAP EPS of $2.97. Its Global Components division generated $4.8 billion in sales despite persistent softness in several verticals, while ECS sales increased 12% year-over-year to $2.5 billion, driven by demand for hybrid cloud, infrastructure software, and AI solutions. Cash flow from operations totaled $326 million, and Arrow maintained its prudent capital allocation by repurchasing $50 million in shares during the quarter.
Arrow Electronics, Inc. (NYSE: ARW) is positioning itself for upcoming expansion through strategic partnerships and service enhancements. In March 2025, the firm broadened its range of privately labeled managed and professional services across North America, aiming to help channel partners capitalize more effectively on opportunities presented by AI, cloud technology, and cybersecurity. This initiative focuses on critical sectors including oversight of large language models, AI implementation, application upgrades, and secure cloud backups.
Arrow Electronics, Inc. (NYSE:ARW), has broadened its product lineup through a worldwide distribution agreement with Ohmite, an industry pioneer in power resistors with over 100 years of experience, serving sectors like transportation and aerospace.
Arrow Electronics, Inc. (NYSE:ARW) is quietly gaining steam and might be a lucrative buy for investors looking for overlooked tech stocks, thanks to stabilized industry circumstances, expanding cloud and AI use, and a strong financial basis.
Overall, ARW ranks 5th On our radar as undervalued tech picks for investment right now is ARW. However, we feel strongly that particular AI stocks present even better opportunities for substantial gains over a brief period. Notably, one AI stock has seen growth year-to-date in 2025 despite many well-known AI equities declining roughly 25%. For those seeking an AI option with stronger prospects than ARW yet trading under five times its earnings, explore our detailed analysis presented in the following report. cheapest AI stock .
READ NEXT: 20 Top AI Stocks You Should Consider Buying Today and 30 Top Stocks to Purchase Currently as Recommended by Billionaires .
Disclosure: There are none to declare. This article was first published here. Insider Monkey .
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