The Nasdaq's resilient run continues into the second half of 2026, with the tech-heavy index posting solid double-digit gains year to date and outperforming the Dow Jones Industrial Average, even as the S&P 500 has also logged healthy advances. Tech-focused exchange-traded fund Technology Select Sector SPDR ETF (XLK) has climbed 25.5% year to date, reflecting continued investor confidence in the sector even after bouts of volatility tied to AI-infrastructure spending debates and shifting Federal Reserve rate expectations.
The latest forecast for worldwide IT spending from Gartner reinforces the optimistic backdrop. Despite lingering macroeconomic and geopolitical uncertainty, the research firm projects global IT spending to rise more than 13% year over year in 2026, surpassing $6.3 trillion, with data center systems, AI-optimized servers and software emerging as the fastest-growing categories.
The sector's momentum through the rest of 2026 is likely to be sustained by durable long-term growth drivers tied to accelerating digital transformation for tech companies, including Unisys UIS, Daktronics DAKT, PagerDuty PD and RF Industries RFIL. Continued build-out of AI infrastructure, rising enterprise adoption of generative AI tools and expanding cloud-computing workloads remain central catalysts, as businesses across industries lean further into automation and intelligent applications.
Growing demand to modernize workflows is expected to keep fueling adoption of generative AI platforms from major players, while enterprises increasingly integrate AI-driven features into existing software stacks, a trend that is also lifting software spending broadly.
Meanwhile, sustained demand for e-commerce, digital payments and contactless delivery solutions continues to underscore the need for expanded 5G infrastructure. Beyond AI and connectivity, blockchain, IoT, smartphones, autonomous vehicles, advanced storage, AR/VR, wearables and next-generation networking and connectivity solutions still offer considerable runway for growth, alongside surging demand for high-speed data across communications networks and AI-optimized data centers heading into 2027.
Here we pick four technology stocks currently trading for less than $20 a share that have strong fundamentals and are well-poised for growth in the second half of 2026. While these stocks trade under $20 and can be more volatile than their costlier peers, strong bottom-line projections and positive estimate revisions in recent times point toward momentum in the near term.
Each of the selected stocks flaunts a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our four picks year to date.
Year-to-Date Performance
Image Source: Zacks Investment Research
Unisys presents a compelling near-term opportunity anchored in strengthening fundamentals and strategic momentum. First-quarter 2026 New Business Total Contract Value surged 45% year over year to $158 million, while backlog expanded to $2.96 billion, signaling healthy deal activity. Management reaffirmed full-year non-GAAP operating profit margin guidance of 9-11%, and Ex-L&S gross margins are expected to improve by a further 100-200 basis points in 2026 through AI-augmented delivery. At its June 2 Investor Day, the company issued upwardly revised 2026 revenue guidance alongside medium-term financial targets, reflecting growing confidence. The April expansion of its Salesforce collaboration — auto-scheduling 70% of field service appointments across 120+ countries — deepens operational efficiency. A June partnership with Antenna further embeds AI observability into Unisys solutions, bolstering margin durability.
The stock is currently priced at $3.75. The Zacks Consensus Estimate for this Zacks Rank #1 company’s 2026 earnings has moved north by 21.3% to 74 cents per share in the past 60 days.
Daktronics enters fiscal 2027 with clear momentum. Its June 24, 2026, results showed record net sales of $838.7 million (+10.9%) and record orders of $860.8 million (+10.2%), while full-year operating margin expanded 290 basis points to 7.3%. A $356.2 million backlog provides near-term revenue visibility. At its April 9, 2026, Investor Day, management outlined a three-year roadmap targeting 7-10% revenue CAGR, 10-12% operating margins, and 17-20% ROIC by fiscal 2028, anchored by a new Mexico manufacturing facility due in 2027. The debut of the Camino 8 platform adds a recurring software revenue stream. With $131.6 million in cash, minimal debt and an expanded $40 million buyback program, Daktronics is well-positioned to reward shareholders as its strategic plan matures.
The stock is currently priced at $19.91. The Zacks Consensus Estimate for this Zacks Rank #2 company’s fiscal 2027 earnings has moved north by 0.8% to $1.21 per share in the past 60 days.
PagerDuty is navigating a pivotal transition with improved fundamentals. It announced a $100 million share repurchase program — a confidence signal backed by $444 million in cash and $41.2 million in the first quarter of fiscal 2027 free cash flow. The company raised its full-year fiscal 2027 non-GAAP EPS guidance to $1.27-$1.32, reflecting sustained margin expansion. A new usage-based Operations Cloud pricing model creates a platform for consumption-driven revenue growth. Strategic AI partnerships spanning 30-plus partners, including Anthropic, Cursor and LangChain, and a June 2026 distribution deal with Ingram Micro in Australia, deepen market penetration. With $316 million in near-term remaining performance obligations, revenue visibility remains intact through the second half of fiscal 2027.
The stock is currently priced at $9.98. The Zacks Consensus Estimate for this Zacks Rank #2 company’s fiscal 2027 earnings has moved north by 4% to $1.30 per share in the past 60 days.
RF Industries is steadily gaining traction across high-growth verticals — data centers, AI infrastructure, aerospace and public safety — positioning the company for meaningful near-term fundamental upside. Its deliberate end-market diversification strategy is bearing fruit, supported by fiscal second-quarter 2026 bookings of $26.3 million and a quarter-end backlog of $20 million, providing solid revenue visibility for the back half of fiscal 2026. Gross margin has expanded to 35.1%, reflecting a favorable product mix and improving operating leverage. Management has explicitly guided for revenue growth to accelerate in the second half of fiscal 2026. RFIL's June 29, 2026, inclusion in the Russell 3000 Index broadens institutional ownership and enhances liquidity. New product launches, including mmWave adapters, extend the company's addressable market opportunity into emerging high-frequency applications.
The stock is currently priced at $17.81. The Zacks Consensus Estimate for this Zacks Rank #2 company’s fiscal 2026 earnings has moved north by 19% to 69 cents per share in the past 60 days.
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Unisys Corporation (UIS): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).