1 Cheap Tech Stock to Buy Right Now

Key Points

• Kyndryl, IBM’s former infrastructure services division, has built a thriving business that Wall Street largely overlooks
• Despite 43% growth in its order book last quarter, Kyndryl trades at just 0.5 times sales and 9.6 times forward earnings
• While not cheap by every metric, this undervalued tech player deserves serious consideration

I’ve been hunting for overlooked tech bargains amid the AI frenzy, and Kyndryl (NYSE: KD) keeps catching my attention. Four years after splitting from IBM, this company has quietly built something impressive that most investors are completely missing.

What makes a stock “cheap” is subjective - it could be low valuation ratios, recent price drops, successful turnarounds, or new growth markets. Kyndryl doesn’t check every box, but it hits enough to make me take notice.

Let’s start with that peculiar name - a mashup of “kin” (relationships) and “tendril” (connections). The linguistic oddity actually reflects what they do best: forming critical IT infrastructure relationships with businesses of all sizes. Whether you’re scaling AI systems or securing cloud data, they’re the behind-the-scenes experts making it happen.

And here’s where it gets interesting - Kyndryl is riding the AI wave brilliantly. Their latest earnings showed flat year-over-year revenue but a massive 43% jump in long-term orders. Revenue from hyperscale data center clients like AWS and Azure surged 86%. When major AI platforms launch billion-dollar initiatives, Kyndryl is likely there handling the complex infrastructure setup and maintenance.

Yet Wall Street snoozes. The stock is down 5% year-to-date while trading at bargain valuations of 0.5 times sales and 9.6 times forward earnings. It’s not perfect - the stock trades at 31.5 times free cash flow and 6.1 times book value, and their multi-year contract revenue recognition model can obscure immediate growth.

Still, I can’t help but see opportunity where others aren’t looking. When everyone’s chasing the flashy AI names, sometimes the real value lies in the companies building the foundation that makes it all possible.

Should you invest $1,000 in Kyndryl right now? That depends on your portfolio needs and risk tolerance. But ignoring this overlooked tech infrastructure play entirely might be the bigger mistake.