Is This Undervalued Tech Stock The Next Big AI Winner?

In today's video, I have one of the best tech companies that you don't know about. This is one of Wall Street's bestkept secrets. A company that the world's biggest stocks like Nvidia, Dell, Amazon all rely on. But this company with a price to earnings ratio of just 15 is trading at just 12 billion despite doing close to this revenue every single quarter. As we enter Q4, let's find out if this is one of the last remaining opportunities of 2026. Before we get into it, if you enjoy these videos, then don't forget to like and subscribe. This means everything to the channel and it lets me know that you want to see more videos like this. I'm aiming for 300 likes. Help me hit that goal. Subscribe to the channel if you're new. And now, let's get straight into it. Arrow Electronics is a global technology distributor and solutions provider that helps companies design, source, and deploy new technologies. The company operates across two major areas, electronic components and enterprise computing solutions, providing products, engineering, and tech platforms to help customers bring products to market. Arrow serves customers across more than 85 countries and works with hundreds of technology manufacturers and suppliers. They have more than 22,000 employees. They rank 148th on the Fortune 500 and 26 years on Fortune's world's most admired companies. This is a stock that you've probably never heard of. Yet, they are the go-to company for the biggest names in tech. companies like Dell, Nvidia, and Amazon. But the list goes on and on because they operate across a wide range of industries including transportation, aerospace and defense, healthcare and medical, data centers, industrial and factory automation, and security. Seriously, this is a company that is integrated into everything. They are doing billions in revenue, and yet the company's market cap is only $12 billion. For context here, this is a company that done 9.9 billion in revenue in the most recent quarter, 19.5 billion in the past 6 months and are on track to do more than $40 billion this year. Yet, their market cap is only about 12 billion. And on top of that, if you look down here at the weighted average shares, their share count is decreasing. They are actually buying back their own shares because they're so cheap. And I'll talk more about this in a moment because this is not something that you usually see. A company doing this sort of revenue with a market cap this low tends to be an unprofitable one. But Arrow Electronics have great margins and a fantastic price to earnings. So what exactly do they provide to customers? When it comes to products and services, Arrow's portfolio covers electronic components, enterprise computing, intelligent solutions, and supply chain solutions. Its electronic components business supplies everything from semiconductors and interconnectors to sensors. Our components and development systems while its enterprise computing business provides hardware, software, cloud, and cyber security solutions. Arrow also provide design, engineering, system integration, security and supply chain services. Just a few weeks ago, Arrow announced it has been awarded distribution rights for the HPE networking product portfolio across North America and select EMA countries. The addition expands Arrow's ability to provide channel partners with the complete HPE portfolio, including HPE Aruba networking and Juniper networking solutions. And this is significant because Hula Packard is becoming one of the fastest growing stocks on the market. It's one of the biggest success stories of 2026. The stock is up almost 200% in the past 6 months. This stock was trading at a ridiculously low PE ratio just a few months ago. While their annual revenue was almost as much as their total market cap, the stock looked like a bargain. And it was a bargain. The company had all the hallmarks that you look for when you see an undervalued stock. Not only did they have a low PE ratio, but they also had a fantastic price to sales and a fantastic earnings growth. When you see all this with an established company, it really should not be ignored. And Arrow Electronics is looking even better today than Hula Packard looked 6 months ago. So this partnership means that Arrow can now offer its channel partners the complete HPE portfolio including Aruba and Juniper. And this is significant because these products cover everything from campus and data center networking to cloud managed networks and AI focused infrastructure. For Arrow the opportunity is significant. Partners can now combine HPE networking with compute storage cloud and other services. So essentially, Arrow is expanding what it can offer to customers while deepening its relationship with HP at a time when networking infrastructure is becoming increasingly important for AI, for cloud, for data center expansion, and so on. The agreement covers the United States and Canada, two of the biggest markets, along with major European markets such as Spain and France. Arrow also announced a new partnership with NXP Semiconductors that could be particularly interesting as demand for Edge AI continues to grow. Again, this is another major semiconductor company. In fact, it's the third largest European semiconductor company with over 30,000 employees and a market cap of over $60 billion. Arrow is now giving customers global access to NXP's new ERA 240 edge AI accelerator through its digital test drive platform. The ERA 240 is designed for edge and embedded AI applications offering up to 40 equivalent tops of processing performance for Arrow. This is another way for the company is helping its customers move from experimenting with AI to actually deploying it. And the applications are ranging from robotics and industrial systems to machine vision and intelligent AI devices. So, Arrow is positioning itself right in the middle of this growing edge AI ecosystem. But these are just the latest partnerships. Arrow already has partnerships in place with Microsoft, with Dell, with IBM. They're a company working with the biggest and best companies in the industry. While back in May, they announced a $1 billion share repurchase program. Now, keep in mind that this company is valued at only $12 billion. Nvidia just announced the biggest buyback in history at 150 billion, but relative to the size of the companies, Arrow's buyback is the equivalent to Nvidia doing nearly half a trillion buyback. And the company is able to do this because they are growing their revenues quarter over quarter. They are growing their EPS, but they are growing it exponentially. Just look at all the figures here. And they're doing this at a time when they're also reducing the share count. The next potential catalyst for Arrow Electronics is their third quarter earnings report due in late October. Analysts expect Arrow to earn close to $5 a share, up over 100% year-over-year on sales of 9.99 billion, up 29% in the September quarter alone. That would mark its third consecutive quarter of tripledigit percentage gains in earnings. Now, let's take a look at the chart because this is where Arrow Electronics gets really interesting. As we can see here, ARW stock has been trading inside a clear upward channel all year. The stock continuing to make higher highs and higher lows throughout the entire year. And more recently, we've seen another strong move higher with the stock pushing above that $230 area which had acted as resistance previously. But it's in the lower side of this trend line. So, we could potentially see the stock continue moving upwards towards the upper boundary of this channel, which by my estimation could send this soaring towards $280. But considering the company's sales, their margins, and their profitability, I wouldn't be surprised to see it go higher. Looking at the RSI, momentum is strong, but it's not in overbought territory just yet. That leaves some room for the stock to continue higher if buying pressure remains strong. And unbelievably, because this stock is so under the radar, trading volume isn't actually all that high. Just a couple of million shares every day compared with the likes of Nvidia that trades hundreds of millions of shares. So technically, ARW is showing a strong uptrend, rising momentum, and a potential breakout setup. But this is not the type of stock that is going to rally 30 or 40% in a single day. This is definitely a long-term hold. Just look at this chart. This one has been going up slowly for months. No big massive gap up, just slowly, gradually increasing week after week. But there is no arguing with 114% year to date. This is about being patient. accumulating and buying the dips when they occur. But don't take this as financial advice because I'm not a financial adviser. However, if you enjoyed this video, if you like hearing about undervalued stocks before the hype, if you like hearing about companies that nobody else is talking about, then drop a comment and give me your thoughts on this company and their projection for the next 12 months. Don't forget to like and subscribe and I'll catch you