"Technology stocks offer investors the promise of growth in ways few other sectors can. After all, tech is synonymous with innovation, spawning new products, services, and features. In 2025 through Oct. 21, the Morningstar US Technology Index rose 22.29%, while the Morningstar US Market Index gained 15.46%. The tech stocks that Morningstar covers look 1.3% overvalued as a group."
"To come up with our list of the best tech stocks to buy now, we screened for: Technology stocks that are undervalued, as measured by our price/fair value metric. Stocks that earn narrow or wide Morningstar Economic Moat Ratings. We think companies with narrow economic moat ratings can fight off competitors for at least 10 years; wide-moat companies should remain competitive for 20 years or more. Stocks that have lower than Extreme Morningstar Uncertainty Ratings. This captures a range of potential outcomes for a company's fair value."
"Endava Morningstar Price/Fair Value: 0.33 Morningstar Uncertainty Rating: High Morningstar Economic Moat Rating: Narrow Industry: SoftwareInfrastructure Software infrastructure firm Endava is the cheapest stock on our list of the best tech stocks to buy. Endava is a next-generation IT services company that primarily assists clients with their digital transformation efforts by creating customized software for them. The stock is trading 67% below our fair value estimate of $27 per share."
Technology stocks outperformed the broader market in 2025 through Oct. 21, with the Morningstar US Technology Index up 22.29% and the Morningstar US Market Index up 15.46%. Covered tech stocks are collectively about 1.3% overvalued. Twelve technology names were identified as the most undervalued as of Oct. 21, 2025, including Endava, Globant, Nice, Akamai, Sabre, Sensata, Fiserv, Adobe, HubSpot, Elastic, Atlassian, and Fidelity National Information Services. Screening criteria included price/fair value undervaluation, narrow or wide Morningstar Economic Moat Ratings, and Uncertainty Ratings lower than Extreme. Endava appears notably cheap, trading 67% below the $27 fair value estimate.
Read at www.morningstar.com
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