5 AI Laggards Poised for a Short-Term Surge: Zacks Rank and Brokerage Targets Point to Undervalued Gains

The AI sector, despite its transformative potential, has faced turbulence in 2025. Trade policy headwinds, macroeconomic uncertainty, and investor rotation toward cyclical sectors have left many AI-driven stocks undervalued. Yet, this volatility creates opportunities for disciplined investors. Five companies—Arista Networks (ANET), HubSpot (HUBS), Adobe (ADBE), Okta (OKTA), and Twilio (TWLO)—stand out for their Zacks Rank Buy/Strong Buy ratings, improved earnings estimates, and consensus-driven price targets. These are not just laggards; they are short-term catalysts in a sector primed for recovery.

The Case for Near-Term Rebounds

The Internet Software & Services sector (Zacks Industry Rank #53) remains a growth engine, fueled by SaaS adoption, cloud migration, and AI integration. Yet, many stocks here have lagged broader market indices. This divergence, coupled with improving fundamentals, suggests a mean-reversion opportunity. The Zacks Rank—designed to capture near-term momentum—flags these names as buys, while brokerage price targets imply average upside of 26%–45%, with some outliers exceeding 70%.

1. Arista Networks (ANET): The Cloud Networking Powerhouse

Zacks Rank: #2 (Buy)
Arista's dominance in cloud networking for AI data centers and high-performance switching (200-/400-gig) positions it as a critical infrastructure player. Its AI-driven tools—like the EOS Smart AI Suite and Arista AVA—enhance automation, security, and analytics, reducing operational costs for hyperscalers and enterprises.

Financially, 2025 estimates point to 18.7% revenue growth and 12.8% earnings growth, with analyst consensus improving by 3.6% over 60 days. Brokerage targets suggest a 23.4% upside from $90.24, with a maximum $130 price tag.

Why now? Its exposure to AI's compute infrastructure—critical as companies scale generative models—is underappreciated. A near-term catalyst could come from hyperscaler capital spending announcements.

2. HubSpot (HUBS): AI-Driven CRM for the Enterprise

Zacks Rank: #2 (Buy)
HubSpot's AI integration—via tools like ChatSpot and AI agents—is accelerating enterprise adoption of its CRM platform. Pricing optimization in its starter editions has boosted retention, while its AI-first marketing tools (e.g., content generation, customer segmentation) are key differentiators.

Revenue growth of 15.4% and 15% earnings growth in 2025 are backed by a 0.1% consensus upgrade over 30 days. Price targets average a 37.5% upside from $544.46, with a $930 ceiling.

Why now? The CRM space is consolidating, and HubSpot's focus on mid-market enterprises—less exposed to macro headwinds—offers stability.

3. Adobe (ADBE): The AI-Infused Creative Giant

Zacks Rank: #2 (Buy)
Adobe's AI push—through Firefly (for Photoshop) and Express AI—has redefined creative workflows. Expanding into digital marketing analytics via AI-driven data tools has broadened its addressable market.

Despite a moderate 9.5% revenue growth forecast, earnings are expected to rise 11.8%, with consensus improving by 1.2% over 7 days. Analysts see a 29.7% upside from $378.04, with a $605 peak.

Why now? Adobe's recurring revenue model insulates it from near-term volatility, while its AI tools attract new SMB customers.

4. Okta (OKTA): The AI-Backed Cybersecurity Gatekeeper

Zacks Rank: #2 (Buy)
Okta's AI-driven identity management platform—including threat detection and hybrid cloud solutions—is critical as enterprises prioritize security in an AI era.

Revenue growth of 9.4% is modest, but earnings are expected to jump 16.7%, with consensus improving 2.8% over 30 days. A 26.2% upside from $99 is achievable, with a $142 target.

Why now? Rising cyber threats and regulatory scrutiny favor Okta's proactive AI tools.

5. Twilio (TWLO): The AI-Enhanced Cloud Communication Leader

Zacks Rank: #1 (Strong Buy)
Twilio's generative AI integration—via tools like Customer AI and partnerships with OpenAI's GPT-4—has repositioned it as a platform for next-gen communication apps. Its collaboration with Alphabet for Google Cloud underscores strategic momentum.

Revenue growth of 7.9% is modest, but earnings could surge 22.3%, with consensus rising 6.9% over 60 days. Despite a conservative 10.8% upside from $116.68, the $170 target implies 45.7% upside, though risks remain.

Why now? Its cloud comms platform is essential for AI applications like chatbots and voice assistants, and its stock's low valuation offers a margin of safety.

Investment Strategy: Opportunistic, but Cautious

These stocks are not without risks. Sector volatility, trade restrictions, and recession fears could pressure valuations. Investors should:
1. Leverage Zacks Rank timing: Buy dips when Zacks upgrades or earnings estimates improve.
2. Diversify across names: ANET and HUBS offer high upside, while OKTA and ADBE provide stability.
3. Set stop-losses: Use trailing stops at 10–15% below entry prices to mitigate downside.

The near-term catalysts—AI adoption milestones, earnings upgrades, or sector rebounds—could ignite these stocks. For those willing to navigate short-term noise, these laggards offer a compelling path to outperformance.

Data as of June 2025. Past performance is not indicative of future results.