With the ugliness in the equities sector, astute investors may want to shift their focus to cheap tech stocks. Granted, among the major indices, the technology-centric Nasdaq Composite suffered the most thus far. On a year-to-date basis, it’s down nearly 30%. However, it also opens the door to significant discounts for patient market participants.

That’s one angle. The other is that tech-driven companies offer some of the most groundbreaking innovations. Again, it’s not to take away from the pain. Certainly, the red ink hurts and I refuse to diminish investors’ frustration. At the same time, acquiring cheap tech stocks now can build a foundation for future growth.

Of course, there are cheap tech stocks and then there are securities too cheap to touch. To help filter out the wheat from the chaff, I enlisted the help of Gurufocus.com. Narrowing down to compelling ideas that genuinely showcase undervalued businesses – as opposed to possible value traps – this investment resource is unparalleled in its utility.

With that, here are cheap teach stocks that astute buyers should consider.

Microsoft (MSFT)

Cheap tech stock, Microsoft (NASDAQ:MSFT) suits myriad content angles. Fundamentally, what I appreciate most about the company is that its operating system (OS) represents the de-facto language of business. According to data from Statista.com, Microsoft Windows dominates the OS segment with over 76% market share.

In addition, the company’s Software as a Solution (SaaS) platform should enjoy permanent relevance. Its Office suite simply stands lightyears ahead of the competition. Yet Wall Street doesn’t seem to take into account the company’s incredible, arguably unparalleled utility. On a year-to-date basis through the Oct. 5 session, MSFT slipped almost 26%.

Nevertheless, this factor helps the case for MSFT as one of the cheap tech stocks to buy. Gurufocus.com labels Microsoft’s business modestly undervalued. The company enjoys strengths across the board, starting from its debt-to-EBITDA ratio of 0.61. This compares favorably to the industry median of 1.2. As well, Microsoft commands growth and profitability metrics that stand within the top echelon of the software sector.

NXP Semiconductors (NXPI)

Founded in 2006 in Eindhoven, Netherlands, NXP Semiconductors (NASDAQ:NXPI) is a semiconductor designer and manufacturer. Its chip-building innovations undergird several industries, including automotive, communication infrastructures and industrial applications. In addition, NXP offers solutions for smart city networks as jurisdictions plan the next phase in connectivity.

Despite the longer-term implications of NXP, its equity shares suffered throughout the year thus far. Since Jan., NXPI stock fell more than 30%. Still, forward-looking investors may be able to snag a discount. Fundamentally, unless you assume that we’ll go back to the Stone Ages, NXP’s innovation in the connectivity sphere seems a reasonable wager.

According to Gurufocus.com, the company features a modestly undervalued profile. Mainly, the soft point for NXPI stems from its okay balance sheet; it’s neither great nor terrible. However, it makes up for this softness through growth and profitability metrics.

NXP’s three-year revenue growth rate stands at 11.9%, better than nearly 60% of its peers. Its operating margin of 27% reflects performance superior to 84% of semiconductor competitors. Therefore, it’s a solid bet among cheap tech stocks to buy.

Oracle (ORCL)

A multinational computer technology firm, Oracle (NYSE:ORCL) specializes in various business applications such as database software, cloud engineered systems and enterprise software. For many top-level corporations, Oracle undergirds their supply chain management. Prior to the coronavirus pandemic, this business arm represented a positive attribute.

Following the onset of Covid-19, the narrative became more complicated. While Oracle never lost its relevance, supply chain disruptions and other macroeconomic headwinds hurt the business. Since the start of this year, ORCL stock declined 24%. Nevertheless, investors have an opportunity here as ORCL ranks among the cheap tech stocks to buy.

According to Gurufocus.com, ORCL rates as modestly undervalued. To be fair, its balance sheet could use some work, I’m not going to shy away from this. However, the positives should help balance the equation favorably.

Most notably, Oracle’s three-year revenue growth rate stands at 12.9%. This beats out the industry median of 7.1%. Also, the company’s net margin is 13.2%, towering over 83% of its peers.

Corning (GLW)

An American multinational tech firm, Corning (NYSE:GLW) is a global-leading innovator in materials science. Per its website, for nearly 170 years, “Corning has combined its unparalleled expertise in glass science, ceramics science, and optical physics with deep manufacturing and engineering capabilities to develop life-changing innovations and products.”

In other words, Corning’s role aligns with a stagehand for a major Broadway production. While it might not be the star of the program, the show wouldn’t go anywhere without capable stagehands. Therefore, GLW fundamentally makes for an intriguing case among cheap tech stocks to buy. However, Wall Street doesn’t see it that way for now, with GLW down nearly 16% YTD.

It might be a mistake to ignore Corning. Per Gurufocus.com, the company features a modestly undervalued business. Here, the fiscal profile is a bit more balanced than some other cheap tech stocks. Combined with decent financial strength, Corning enjoys robust growth and profitability metrics.

Its three-year revenue growth rate stands at 11.6%, better than 73% of its peers. On the bottom line, the company’s net margin pings at 13.7%. That’s better than nearly 85% of the industry.

Panasonic (PCRFY)

When it comes to the electric vehicle revolution, Panasonic (OTCMKTS:PCRFY) makes a compelling case for cheap tech stocks to buy. Sure, you can always buy shares of Tesla (NASDAQ:TSLA). In fact, as of this writing, Gurufocus.com labels TSLA as significantly undervalued. However, Panasonic’s relevance comes in the form of its innovative EV battery technologies.

Fundamentally, let’s just imagine that in the future, Tesla loses its luster. It could happen with several major legacy automakers pivoting sharply to EVs. At that point, any number of brands could be the definitive sector leader. But to get there, they will need superior battery tech. Panasonic already amassed a significant lead and it might not give it up.

For now, contrarian investors will likely appreciate its discounted premium. Per Gurufocus.com, PCRFY rates as modestly undervalued. Here, the emphasis centers on decent stability in the balance sheet and solid profitability metrics.

Granted, Panasonic’s weakness is in the growth arena. However, because the company enjoys a dominant profile in the burgeoning EV battery segment, the growth will likely come. Therefore, PCRFY ranks as one of the cheap tech stocks to buy.

PayPal (PYPL)

Moving into the final two market ideas for cheap tech stocks, I’m going to dial up the risk-reward profile. First, let’s discuss digital payments and business services platform PayPal (NASDAQ:PYPL). Fundamentally, the company aligns with the burgeoning gig economy. One factor that may help PayPal is the return-to-the-office narrative. With a possible recession on the way, employers may eventually force an ultimatum on their employees.

Most will probably succumb to the pressure because you don’t want to lose a paycheck during rough economic times. Still, a stubborn few will likely branch out on their own and thus join the gig economy. Already, experts project this segment to reach a valuation of at least $455 billion next year. Current workforce drama will bolster this framework, thus possibly making PYPL one of the cheap tech stocks to buy.

Now, for the numbers. Gurufocus.com labels PYPL significantly undervalued. Despite PYPL’s sharp losses in the open market, PayPal enjoys a balanced fiscal profile. Most notably, the company features a three-year revenue growth rate of 18.5% (compared to industry median of 2.3%). Also, its return on equity stands at nearly 10%, ranked better than 64% of its peers.

Adobe (ADBE)

When mentioning Adobe (NASDAQ:ADBE) as one of the cheap tech stocks to buy, an immediate response may be that there’s a reason for it. Perhaps best known for its Photoshop software, Adobe is a king among creatives. The problem? Many folks regard the creatives sector as a hobby, lacking much financial or utilitarian rigor.

However, data regarding the rise of the gig economy suggests otherwise. According to one source, graphics designers represent the largest component in the freelancing space, comprising 90% of the segment. Personally, I find this stat difficult to believe. Nevertheless, I’m sharing my sources so you can be the judge.

What’s less in question is Adobe’s financial discount. According to Gurufocus.com, ADBE rates as a significantly undervalued investment. Although ADBE shares fell 47% since the beginning of this year, the underlying firm offers a very encouraging picture.
On the balance sheet, Adobe enjoys an Altman Z-Score of 9.3, meaning that it features low bankruptcy risk. For income, its three-year revenue growth rate stands at 21.9%, better than 78% of its peers. On the bottom line, Adobe’s operating margin of over 35% beats out 97% of the competition.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.