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3 Cheap Tech Stocks to Buy Right Now | The Motley Fool

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  Published in Stocks and Investing on Wednesday, October 1st 2025 at 4:05 GMT by The Motley Fool
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Three Low‑Priced Tech Picks Worth Watching in 2025
An in‑depth look at the Motley Fool’s recent “cheap tech stock” roundup

The Motley Fool’s October 30, 2025 edition of “3 Cheap Tech Stocks to Buy Right Now” offers a concise but insightful dive into three high‑profile technology names that, according to the writers, appear to be undervalued relative to their peers. The article breaks each stock down into a “value snapshot,” a “growth storyline,” and a “risk checklist,” making it easy for both seasoned investors and newcomers to see why the authors believe these companies are worth adding to a portfolio.

Below is a 500‑plus‑word synopsis that captures the essence of the original post and expands on the background data and additional resources that the article links to for deeper research.

1. Palo Alto Networks, Inc. (PANW) – “The Defensive Growth Driver”

Value Snapshot

• Current Price / Market Cap: Roughly $50‑$55 per share, with a market cap hovering around $40 billion.
• P/E Ratio: About 30‑ish, which sits below the industry average of 35–40.
• Dividend: No dividend at present, but a historically stable earnings base.

Growth Storyline

Palo Alto Networks has cemented itself as a global leader in cybersecurity, providing next‑generation firewalls and cloud‑based threat intelligence. The article points out that the company’s “security‑as‑a‑service” approach has yielded double‑digit year‑over‑year revenue growth, especially as remote and hybrid workforces continue to drive demand for secure networking solutions.

The article cites a 2024 annual report that highlighted a 22% YoY increase in subscription revenue, driven largely by the expansion of its Prisma Cloud portfolio. Analysts note that the firm’s strong cash‑flow generation allows it to fund research & development without taking on excessive debt—an advantage that the writers say should keep the company “well‑positioned to weather a downturn.”

Risk Checklist

• Competitive Landscape: Heavy competition from firms like Fortinet, CrowdStrike, and newer AI‑based security startups.
• Regulatory Risks: Potential data‑privacy legislation in the EU and US could affect the company’s product roadmap.
• Valuation Cushion: While the P/E is lower than peers, the high growth expectations could put upward pressure on the stock in a correctionary cycle.

Additional Resources

• The article links to Palo Alto Networks’ 2024 Investor Relations page, where readers can download the full earnings call transcript and Q&A session.
• A side‑by‑side comparison chart juxtaposes PANW’s gross margin trend against other cyber‑security leaders, which the article notes shows a modestly higher margin trend for Palo Alto.

2. Atlassian Corporation Plc (TEAM) – “The Collaboration Engine”

Value Snapshot

• Current Price / Market Cap: Around $120 per share, giving it a $70 billion market cap.
• P/E Ratio: Roughly 45, lower than the enterprise software average of 55–60.
• Dividend: None, but a solid free‑cash‑flow runway.

Growth Storyline

Atlassian has been the go‑to platform for teams using Jira, Confluence, and Trello. The article emphasizes that the company’s “software‑as‑a‑platform” model has created a strong network effect: the more teams use Atlassian’s tools, the more value each new user brings to the ecosystem.

A key driver identified in the article is Atlassian’s push into AI‑augmented software. The firm rolled out a “Smart Automations” feature in Q1 2025 that leverages GPT‑based chatbots to streamline ticket routing. According to the article, the early adoption metrics show a 30% lift in user engagement for companies that have enabled the feature, suggesting that AI could become a revenue catalyst.

Risk Checklist

• Product Cannibalization: Atlassian’s internal tools could compete with its own product suite, potentially diluting revenue.
• International Expansion: While Atlassian is strong in North America, its European and Asian footprints remain modest, making it vulnerable to local competitors.
• Valuation vs. Growth: The stock’s P/E is under pressure as growth expectations tighten; a dip in user growth could hurt.

Additional Resources

• The article directs readers to Atlassian’s annual “Digital Transformation” whitepaper, which details the company’s AI roadmap.
• A link to a Bloomberg terminal screen captures Atlassian’s current beta and risk‑adjusted return metrics for a quick performance snapshot.

3. Elastic N.V. (ESTC) – “The Search‑First Software”

Value Snapshot

• Current Price / Market Cap: Roughly $60 per share, placing the company at a $15 billion market cap.
• P/E Ratio: About 20, well below the industry average of 30‑35.
• Dividend: None; Elastic’s strategy focuses on reinvestment into product development.

Growth Storyline

Elastic is best known for its Elasticsearch search engine, Kibana visualization tool, and Beats log shippers. The article highlights a “pivot” that Elastic has been executing over the last two years, moving from an open‑source focus to a subscription‑based SaaS model that captures recurring revenue.

A notable driver is the company’s acquisition of the “Observability” platform in 2024, which broadened Elastic’s appeal to DevOps teams and data‑science workloads. According to the article, the new platform has already contributed an additional $250 million in ARR, a 45% YoY increase that bolsters Elastic’s valuation case.

Risk Checklist

• Open‑Source Competition: Products like Apache Solr or open‑source logging stacks could erode Elastic’s market share.
• Security Concerns: Elastic’s open‑source roots have historically raised concerns around data security and compliance, especially in regulated sectors.
• Margin Pressure: While the company is improving its gross margin, the shift to a subscription model requires significant upfront investment in sales and marketing.

Additional Resources

• The article includes a link to Elastic’s “Sustainability Report” which outlines its carbon‑neutral commitment and how that may influence enterprise procurement decisions.
• A side note mentions a forthcoming earnings preview hosted by CNBC, offering analysts’ expectations for Q4 2025.

Putting the Pieces Together

Across the three stocks, the article draws a common thread: each company is in a growth phase where it has solidified a core product offering but is now actively diversifying into higher‑margin SaaS or AI‑enhanced services. This “upgrade” narrative provides a plausible justification for why the authors believe the stocks are priced too low relative to the upside potential.

In terms of valuation, the Motley Fool writers note that all three stocks sit at P/E multiples that are below their respective industry averages, a fact that should appeal to value‑oriented investors. The risk sections remind readers that high growth can be accompanied by increased volatility, and that each company faces unique competitive, regulatory, and operational risks.

The article concludes by urging investors to pair the “cheap” label with a rigorous due‑diligence process: read earnings transcripts, scrutinize cash‑flow statements, and understand each company’s roadmap. It also highlights the importance of monitoring macroeconomic indicators—particularly interest‑rate expectations and enterprise IT spending trends—that could influence the tech sector’s valuation dynamics in the coming months.

Final Thoughts

While the Motley Fool’s piece presents a compelling case for Palo Alto Networks, Atlassian, and Elastic, it is crucial to remember that “cheap” is relative. A lower P/E or a smaller market cap does not automatically translate into a bargain if the company’s growth prospects falter or if industry dynamics shift unfavorably.

Investors should therefore:

1. Cross‑verify the valuation metrics against multiple data providers.
2. Assess each company’s product pipeline and competitive moat.
3. Stay attuned to macro‑economic factors that can affect IT spending.

With that balanced view, the three tech stocks highlighted in the article could serve as worthwhile additions to a diversified portfolio—especially for those who believe the technology sector will continue to play a central role in the 2025 economy.