Wall Street loves a good growth story—until someone asks to see the electricity bill. On October 30, the AI trade received an expensive reminder that building the future requires paying for it first. Reuters reported that a selloff in technology shares pushed MSCI’s global index down 1.5%, after results from Intel and Amazon put the cash demands of AI spending under an uncomfortable spotlight. Intel plunged 28.6%, while the Philadelphia semiconductor index lost more than 7%, its largest one-day decline since late June. Alphabet had already set the nervous tone a day earlier, sliding 12.6% after reporting that its AI spending had pushed cash flow into negative territory. The future still looked intelligent. Financing it was becoming the awkward part.

The anxiety had been gathering well before that selloff. Reuters reported on October 15 that South Korea’s KOSPI index, home to some of the world’s largest chipmakers, dropped roughly 8% in a single session. Saxo Bank chief investment strategist Charu Chanana suggested that the Asian retreat reflected a repricing of the cost of capital more than a sudden deterioration in technology fundamentals. Investors were still interested in the AI dream; they were simply becoming more particular about the interest charged along the way.

Interest rates help explain why Wall Street’s enthusiasm has started checking its wallet. Bloomberg reported on October 4 that benchmark 10-year Treasury yields were near 5.3%. Franklin Templeton Institute head market strategist Chris Galipeau said the conversation would change if yields reached 6%. That would give investors another number to watch alongside the impressive computing statistics: the cost of borrowing enough money to keep the expansion going.

For the companies writing those checks, the sums are becoming harder to tuck neatly into a growth presentation. Bloomberg Intelligence analyst Robert Schiffman said hyperscalers including Meta, Amazon, Alphabet, Microsoft, and Oracle now face cash needs far beyond what they generate, pushing them toward debt markets. AI may be able to draft a business plan in seconds, but it has yet to persuade a lender to accept enthusiasm as repayment.

Oracle is one of the companies Schiffman highlighted, and its selloff raises a question worth investigating: why does Wall Street remain so supportive when the share price looks considerably less enthusiastic?

Chip Stocks Have Competition Crashing the Party

For chipmakers, financing is only part of the headache. Competition has also pulled up a chair. Bloomberg reported on October 13 that the KOSPI fell 5.5% in one day after China’s CXMT announced a memory-chip breakthrough, challenging the bullish case for its global peers. Investors already wrestling with the cost of expanding production now had another question to consider: how much of the eventual payoff would competitors claim?

The same report said Broadcom chief executive Hock Tan compared the approach of some AI investors to gambling and warned that the industry could encounter funding limits. It was a pointed reminder that even a promising technology needs someone willing—and able—to finance its ambitions. A compelling presentation can attract attention, but the next construction invoice generally requires money.

Nvidia sits squarely at the center of this debate. Its role in AI makes it a focal point for both excitement about future demand and anxiety over how long the spending can continue.

Signs of greater caution are also appearing among the institutions financing the expansion. The same Bloomberg report said JPMorgan Chase and Goldman Sachs took the rare step of limiting their exposure to a loan for AI startup Volta Infrastructure Holdings. In Asia, the collapse of Nvidia-backed data center operator Firmus Grid’s initial public offering has made investors more selective about AI deals whose appeal rests on future earnings. Those earnings may eventually arrive, but investors increasingly want a clearer timetable before reserving their seats.

That leaves investors with a familiar challenge beneath all the futuristic machinery: finding growth at a price that makes financial sense. A falling share price can create an opportunity, but a discount deserves a closer look at the business attached to it. With that in mind, we screened for companies combining relatively low forward earnings multiples with expectations for meaningful sales growth.

CHECK THIS OUT: Q3 2026 Hedge Fund Investor Letters

Our Methodology

For this article, we screened our database of 1,006 hedge funds for stocks trading at a forward price-to-earnings ratio below 15 and carrying expected forward revenue growth of at least 15%, pairing a valuation filter with a sales-growth requirement. From the qualifying companies, we selected the 10 largest by market capitalization and ranked them in ascending order by the number of hedge funds holding stakes in each as of Q2 2026.

10 Best Cheap Stocks to Buy for 2027

10. Dell Technologies Inc. (NYSE:DELL)

Market capitalization: $261.88 billion
Forward P/E: 13.30
Expected forward revenue growth: 34.15%
Number of hedge fund holders: 77

A $95 Billion Backlog Gives the AI Story Some Weight

Dell Technologies Inc. (NYSE: DELL) is bringing something more substantial than an AI presentation to the investment debate: an enormous order book. In its September 1 fiscal second-quarter release, the company reported $47 billion in revenue, up 58% year over year, alongside adjusted diluted earnings of $7.04 per share, up 203%. AI server orders reached $60.9 billion, while AI server revenue totaled $16.4 billion and the outstanding backlog climbed to $95 billion. Those figures describe different stages of the sales process, an important distinction when enthusiasm runs ahead of accounting. Orders signal demand; delivered systems generate revenue; collecting the money completes the job.

The expansion also reaches beyond the machines carrying the AI label. Traditional server and networking revenue rose 122% to $10.5 billion, while storage revenue increased 26% to $4.9 billion. On the earnings call, management linked demand to data center modernization, including better power efficiency, consolidation, and the need to support new workloads. That broadens the investment case: customers upgrading an entire computing environment can purchase several categories of equipment along the way. It also gives investors a more useful question than whether AI spending remains fashionable. The question is whether the company can keep converting that wider demand into profitable shipments without letting component constraints dictate the schedule.

Chief financial officer David Kennedy described the quarter as delivering “record revenue, record EPS and a record $4.3 billion returned to shareholders.” Management raised fiscal 2027 revenue guidance to $192 billion, an increase of $25 billion from its previous outlook. For investors researching undervalued growth stocks, the supplied forward earnings multiple offers a potentially interesting entry point, provided those earnings expectations hold. The backlog is encouraging, but it is not cash already sitting in the bank. Delivery timing, customer readiness, and working-capital requirements remain essential checks. A very large order book is a good problem to have; financing and fulfilling it still require very good execution.

Ranking rationale: Dell Technologies Inc. (NYSE: DELL) ranks tenth because 77 hedge funds held stakes in the supplied Q2 2026 dataset, the lowest count among these ten selections. Its screening appeal combines a 13.30 forward P/E with 34.15% expected revenue growth, supported operationally by its expanding infrastructure business.