Is United Airlines Holdings (UAL) a Cheap NASDAQ Stock to Buy According to Hedge Funds?

We recently published a list of the 11 Cheap NASDAQ Stocks to Buy According to Hedge Funds. In this article, we are going to take a look at where United Airlines Holdings, Inc. (NASDAQ:UAL) stands against other cheap NASDAQ stocks.

On April 10, Dan Ives, Head of Global Tech Research at Wedbush Securities, appeared on an interview at CNBC and expressed that the tech sector could be heading into a period of major volatility. Dan Ives addressed the current landscape for technology companies and pointed out that while a temporary pause in tariffs has provided some structure, the sector remains uncertain in general. He noted that even with this framework, large tech purchases are still being downsized or paused, which contributes to ongoing volatility, especially as companies approach earnings season. Many tech firms are either withholding guidance or providing only general outlooks. Ives described the situation as a storm whose full damage is only beginning to be assessed, with the industry still only a quarter of the way through the fallout. He explained the sharp pullback in major tech stocks by likening it to emerging from a storm and confronting the resulting damage.

Ives highlighted that the uncertainty in tech has been amplified by the escalating tariffs on China, which are now as high as 125%, and are a major concern for a lot of companies, as China remains central to the global tech supply chain. Ives also pointed out that the recent tariffs on China have forced companies to reconsider the costs and logistics of importing critical components. For example, a $100,000 part might now cost double due to tariffs, causing companies to halt or delay large investments. This has resulted in a notable pause in tech spending, which he expects to continue at least through the current quarter. He cautioned that the June quarter is likely to be very weak. He maintained that, despite the challenges, he has not downgraded tech stocks, drawing on lessons from the pandemic playbook, where periods of uncertainty eventually led to clear winners and losers. Ives also addressed concerns that tech companies, by pulling back on spending, might risk drawing negative attention from the administration, especially given recent meetings between tech CEOs and the president. He reiterated that China is the epicenter of the current turmoil and that big tech is caught in the middle of a high-stakes situation, with companies still trying to navigate the evolving landscape.

Ives predicted that Street estimates are likely to see earnings cuts of about 10% across internet and big tech companies, which reflects the broader pullback in spending and ongoing volatility.

Our Methodology

We first used the Finviz stock screener to compile a list of cheap NASDAQ stocks that had a forward P/E ratio under 15 as of April 21. We then selected the 11 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 1000 elite money managers.

Note: All data was sourced on April 21.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

United Airlines Holdings, Inc. (NASDAQ:UAL)

Forward P/E Ratio as of April 21: 7.13

Number of Hedge Fund Holders: 86

United Airlines Holdings, Inc. (NASDAQ:UAL) provides air transportation services in the US, Canada, the Atlantic, the Pacific, and Latin America. It transports people and cargo through its mainline and regional fleets. It also offers ground handling, flight academy, frequent flyer award non-travel redemptions, and maintenance services for third parties.

In FQ1 2025, United Airlines achieved a record $13.2 billion in total operating revenue, which was a 5.4% increase year-over-year. This performance is influenced by the company’s strategy of winning brand loyal customers. Despite the current macroeconomic challenges and fewer people wanting to travel in the main part of the plane within the US, United is still doing well. This is due to the focus on its 7 key hubs, that has positioned the company as a brand loyalty leader in 6 of them.

United Airlines Holdings, Inc. (NASDAQ:UAL) is making investments to attract and retain brand-loyal customers. These include building new and larger clubs in key hubs like Houston, San Francisco, and Denver. It’s also installing Starlink’s high-speed Wi-Fi on its aircraft, with the first Starlink-enabled regional flight expected in spring 2025 and mainline aircraft by the end of 2025.

Patient Capital Management stated the following regarding United Airlines Holdings, Inc. (NASDAQ:UAL) in its Q4 2024 investor letter:

“United Airlines Holdings, Inc. (NASDAQ:UAL) had a strong fourth quarter, gaining 70.2% in the period. The company benefitted from continued strong demand that surprised the market as well as the initiation of a buyback program, the first since COVID. There continues to be strong travel demand from both retail and business travelers. According to the International Air Transport Association (IATA), global air passenger travel is still below the pre-COVID implied trend path despite reaching a new all-time high this year. United’s focus on the customer over the last few years has led to strong improvement in net promoter scores (NPS) which should continue to flow through the model via better TRASM (total revenue per available seat mile) and higher cash flows and earnings. As of today, United alone accounts for ~30% of the overall industry’s profits. We expect this market share to grow and be defensible as we transition to an environment where customer service becomes the differentiating factor, and scale provides unparalleled ability to reinvest in the customer experience.”

Overall, UAL ranks 2nd on our list of the cheap NASDAQ stocks to buy according to hedge funds. While we acknowledge the growth potential of UAL, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than UAL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.