12 undervalued stocks with strong upside potential in 2025

Buying an undervalued stock is like stumbling upon a forgotten treasure on a dusty shelf. The market, often irrational in the short term, always ends up correcting its excesses — both upwards and downwards. A solid, profitable company that’s temporarily overlooked due to noise or an unfavourable cycle can offer an exceptional entry point before the market "corrects" itself.

In 2025, amid rising interest rates, geopolitical tensions, and accelerating technological change, many shares are trading below their fair value. Some show a P/E* that’s too low for their growth potential, others offer growing dividends ignored by the market, and a few are simply suffering from a lack of narrative.

This is the mechanism we’ll examine here, through 12 stocks we consider undervalued but with real upside potential. For each one, we’ve analysed the fundamentals, identified possible catalysts, and evaluated the risks.

Here’s our carefully argued selection of 12 undervalued stocks with high potential in 2025.

#1 – Alphabet

Despite ongoing fears around generative AI and its supposed fall from dominance, Alphabet continues to post strong fundamentals. Its 2025 estimated P/E ratio of 16.6 is well below the S&P 500 average (19), even as its revenue grows across all segments. The cloud division is booming, YouTube remains a cash machine, and the acquisition of Wiz marks a serious move into cybersecurity.

On top of that, it has a stable operating margin and massive cash reserves to fund innovation while rewarding shareholders. The "AI risk" seems largely priced in, opening a window of opportunity for patient investors.

#2 – Dell Technologies

Few tech stocks are as overlooked yet as well positioned for the AI boom as Dell. With a P/E of 11.3 and a PEG of 0.48, its current valuation is hard to justify given its fundamentals. Dell provides the infrastructure for data centres and is actively rolling out AI across its PCs and workstations. EPS growth forecasts for 2025 are around +23%.

The 2% dividend adds a yield cushion for long-term investors. True, a slowdown in IT spending could weigh short term, but at these valuation levels, much of the risk is already priced in. The risk/reward ratio looks clearly favourable.

#3 – Qualcomm

Often compared to Nvidia but with less explosive growth, Qualcomm remains a core stock for playing tomorrow’s connectivity: 5G, IoT, automotive, smart devices. With a P/E around 12 and EPS growth expected at +28% this year, the revaluation could be sharp if results deliver.

It also offers a 2.3% dividend yield, which is notable in the tech world. Its automotive partnerships and diversification beyond smartphones add medium-term visibility.

#4 – Pinduoduo

Arguably the most controversial pick here, but also one of the most impressive in terms of numbers. Pinduoduo (PDD), parent company of Temu, boasts +59% revenue growth with a P/E of just 10.4. Its operating margin is 27.5%, and it carries virtually no debt.

The only real justification for this depressed valuation is China-related geopolitical risk. But fundamentally, PDD ticks every box: growth, profitability, financial discipline. It’s a textbook case of a stock worth far more than its current price, which could surge if global tensions ease.

#5 – First Solar

The stock has faced pressure since the start of the year, partly due to political uncertainty around renewable energy support. Yet First Solar remains a clear US solar industry leader, with a strong order book and improving margins.

Progress in battery storage technology is reinforcing its model, making solar installations more efficient and profitable. Long-term investors have a rare opportunity here to buy at a discounted price, ahead of a likely sector rebound.

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#6 – Sysco

This well-known US food distributor is a dividend favourite in the hospitality sector. But behind its stability lies financial discipline: a rising dividend for over 50 years, regular share buybacks, and profitable growth.

The stock is rated 4 stars by fundamental analysts and still trades below its estimated intrinsic value. It’s not a "rocket stock," but for long-term investors, it’s a solid portfolio cornerstone.

#7 – Energy Transfer

Often overlooked, the midstream energy sector is strategic — and Energy Transfer is at its heart, operating vital oil and gas infrastructure. Its current yield is among the highest on the market, and valuation remains low, even accounting for sector-specific risks.

The company maintains a disciplined distribution policy and resists pressure to convert to a C-Corp, which could eventually become a revaluation trigger. Ideal for those seeking cash flow in an uncertain market.

#8 – Intel

Criticised for years over technological delays, Intel is now making a comeback. Its bold bet on US-based chip foundries and sovereign semiconductors may pay off in the medium term.

The stock is still well below historical highs, with a valuation that reflects deep investor scepticism. If management delivers on its roadmap, revaluation potential is clear — especially in a world facing growing supply chain tensions.

#9 – Sonoco Products

Little known to the general public, Sonoco is a key player in industrial packaging — a sector with steady demand. It generates solid free cash flow and maintains an attractive dividend. Its valuation remains lower than peers, making it an underrated but efficient investment.

Value-oriented investors will find a stable holding here, with low volatility and reliable income.

#10 – Uber

Long unprofitable, Uber is finally turning into a cash machine. Recent results show sharply improved margins, sustained revenue growth, and increased efficiency.

Yet the stock remains undervalued relative to its prospects. With a dominant position in ride-hailing, delivery, and soon autonomous vehicles, Uber is a key player in the future of urban mobility. Another case where the market perception is lagging behind reality.

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#11 – Johnson & Johnson

A healthcare blue chip, J&J is a model of consistency. Its dividend has been growing steadily for decades, and its balance sheet is rock solid. Yet the stock trades at a discount to its estimated fair value.

In a volatile market, this kind of stock is a cornerstone for any long-term portfolio, especially to smooth out volatility.

#12 – PayPal

Often dismissed as a fallen tech star, PayPal is making a comeback with clear ambitions: strategic refocus, cost-cutting, and repositioning on high-margin segments. Its current valuation seems to reflect a worst-case scenario that isn’t materialising.

With a huge user base, renewed partnerships, and strong cash generation, PayPal could surprise. A chance for those who can spot a turnaround story early.