10 Best Deeptech for February 2026
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Market Overview & Selection Criteria
In the current market environment, technology and healthcare sectors show resilience amid macroeconomic shifts, with strong demand for semiconductors, medical devices, and renewable energy solutions driving growth. Value Sense's automated fundamental analysis platform selected these 10 best stock picks based on high Quality ratings (above 5.7), robust intrinsic value estimates indicating potential undervaluation, positive ROIC, healthy FCF margins, and revenue trajectories signaling long-term potential. Stocks were curated from deep tech and growth themes using machine learning-driven screens for undervalued stocks to buy, prioritizing companies with superior gross margins, low debt-to-equity where possible, and impressive 1Y returns. This stock watchlist emphasizes diversified investment opportunities across semiconductors, telecom, networking, biotech, photonics, autos, solar, and data storage.
Featured Stock Analysis
Stock #1: ASML Holding N.V. (ASML)
| Metric | Value |
|---|---|
| Market Cap | $559.0B |
| Quality Rating | 7.8 |
| Intrinsic Value | $914.1 |
| 1Y Return | 93.4% |
| Revenue | €31.4B |
| Free Cash Flow | €10.7B |
| Revenue Growth | 11.0% |
| FCF margin | 34.1% |
| Gross margin | 53.1% |
| ROIC | 28.2% |
| Total Debt to Equity | 13.8% |
Investment Thesis
ASML Holding N.V. stands out as a leader in semiconductor equipment with a Quality rating of 7.8, the highest in this watchlist. Its intrinsic value of $914.1 suggests significant undervaluation relative to market dynamics, supported by €31.4B in revenue and €10.7B free cash flow. With a 11.0% revenue growth, 34.1% FCF margin, 53.1% gross margin, and 28.2% ROIC, ASML demonstrates exceptional capital efficiency and profitability. The 13.8% total debt to equity reflects prudent balance sheet management, while a stellar 93.4% 1Y return underscores its momentum in the chip manufacturing ecosystem. This positions ASML as a core holding for investors analyzing ASML stock analysis in tech-heavy portfolios.
Key Catalysts
- Dominant position in EUV lithography fueling AI and advanced chip demand
- Strong revenue growth and FCF generation supporting R&D and dividends
- High ROIC indicating efficient scaling in semiconductor supply chain
Risk Factors
- Cyclical semiconductor industry exposure to global trade tensions
- High market cap $559.0B may limit short-term upside volatility
- Currency fluctuations from euro-denominated financials
Stock #2: ResMed Inc. (RMD)
| Metric | Value |
|---|---|
| Market Cap | $36.9B |
| Quality Rating | 6.9 |
| Intrinsic Value | $249.1 |
| 1Y Return | 0.5% |
| Revenue | $5,398.1M |
| Free Cash Flow | $1,788.6M |
| Revenue Growth | 9.6% |
| FCF margin | 33.1% |
| Gross margin | 61.0% |
| ROIC | 36.5% |
| Total Debt to Equity | 15.8% |
Investment Thesis
ResMed Inc. excels in healthcare devices with a solid Quality rating of 6.9 and intrinsic value at $249.1, highlighting undervaluation potential. The company reports $5,398.1M revenue, $1,788.6M free cash flow, 9.6% revenue growth, 33.1% FCF margin, 61.0% gross margin, and top-tier 36.5% ROIC. Despite a modest 0.5% 1Y return, its 15.8% total debt to equity and $36.9B market cap provide stability for steady growth in sleep apnea and respiratory markets. This makes RMD a defensive pick in healthcare stock picks for balanced stock watchlist exposure.
Key Catalysts
- Expanding telehealth and digital health solutions driving adoption
- Exceptional gross margin and ROIC from premium product pricing
- Consistent FCF enabling acquisitions and shareholder returns
Risk Factors
- Regulatory changes in healthcare reimbursement policies
- Competition in connected health devices
- Slower 1Y return amid broader market rotations
Stock #3: Nokia Oyj (NOK)
| Metric | Value |
|---|---|
| Market Cap | $35.0B |
| Quality Rating | 6.2 |
| Intrinsic Value | $8.8 |
| 1Y Return | 37.4% |
| Revenue | €19.1B |
| Free Cash Flow | €1,463.3M |
| Revenue Growth | (1.7%) |
| FCF margin | 7.7% |
| Gross margin | 42.2% |
| ROIC | 10.3% |
| Total Debt to Equity | 24.7% |
Investment Thesis
Nokia Oyj offers telecom infrastructure value with a Quality rating of 6.2 and intrinsic value of $8.8, pointing to upside in 5G networks. Key metrics include €19.1B revenue, €1,463.3M free cash flow, 1.7% revenue growth (stabilizing), 7.7% FCF margin, 42.2% gross margin, 10.3% ROIC, and 24.7% total debt to equity at a $35.0B market cap. The 37.4% 1Y return reflects recovery potential, making NOK an attractive undervalued stock in connectivity themes.
Key Catalysts
- 5G and enterprise network deployments accelerating revenue
- Improving FCF margin from cost discipline
- Solid 1Y return signaling turnaround momentum
Risk Factors
- Negative revenue growth from legacy business transitions
- Geopolitical risks in telecom equipment supply
- Moderate ROIC compared to pure tech peers
Stock #4: Ubiquiti Inc. (UI)
| Metric | Value |
|---|---|
| Market Cap | $33.9B |
| Quality Rating | 7.4 |
| Intrinsic Value | $166.4 |
| 1Y Return | 38.5% |
| Revenue | $2,757.0M |
| Free Cash Flow | $599.6M |
| Revenue Growth | 36.8% |
| FCF margin | 21.8% |
| Gross margin | 44.4% |
| ROIC | 94.7% |
| Total Debt to Equity | 20.2% |
Investment Thesis
Ubiquiti Inc. shines in networking hardware with a 7.4 Quality rating and $166.4 intrinsic value, backed by $2,757.0M revenue, $599.6M free cash flow, explosive 36.8% revenue growth, 21.8% FCF margin, 44.4% gross margin, and standout 94.7% ROIC. At $33.9B market cap with 20.2% total debt to equity and 38.5% 1Y return, UI exemplifies high-growth efficiency for UI stock analysis.
Key Catalysts
- Rapid revenue growth from Wi-Fi and enterprise solutions
- Elite ROIC driving scalable profitability
- Strong 1Y return amid networking demand surge
Risk Factors
- Dependence on wireless market cycles
- Potential margin pressure from competition
- Elevated valuation multiples post-growth
Stock #5: Natera, Inc. (NTRA)
| Metric | Value |
|---|---|
| Market Cap | $31.6B |
| Quality Rating | 6.0 |
| Intrinsic Value | $84.7 |
| 1Y Return | 31.1% |
| Revenue | $2,116.7M |
| Free Cash Flow | $106.1M |
| Revenue Growth | 38.2% |
| FCF margin | 5.0% |
| Gross margin | 63.7% |
| ROIC | (57.5%) |
| Total Debt to Equity | 14.8% |
Investment Thesis
Natera, Inc. leads in genetic testing with 6.0 Quality rating and $84.7 intrinsic value. Metrics feature $2,116.7M revenue, $106.1M free cash flow, 38.2% revenue growth, 5.0% FCF margin, 63.7% gross margin, but negative 57.5% ROIC at $31.6B market cap. 14.8% total debt to equity and 31.1% 1Y return highlight biotech momentum in NTRA analysis.
Key Catalysts
- High revenue growth from liquid biopsy expansion
- Premium gross margin in diagnostics
- Improving path to positive FCF and ROIC
Risk Factors
- Negative ROIC from R&D investments
- Clinical trial and reimbursement uncertainties
- Early-stage FCF margin
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Stock #6: Lumentum Holdings Inc. (LITE)
| Metric | Value |
|---|---|
| Market Cap | $28.0B |
| Quality Rating | 5.7 |
| Intrinsic Value | $73.4 |
| 1Y Return | 366.6% |
| Revenue | $1,841.9M |
| Free Cash Flow | ($12.3M) |
| Revenue Growth | 33.6% |
| FCF margin | (0.7%) |
| Gross margin | 30.6% |
| ROIC | 3.8% |
| Total Debt to Equity | 420.1% |
Investment Thesis
Lumentum Holdings Inc. focuses on photonics with 5.7 Quality rating and $73.4 intrinsic value. It shows $1,841.9M revenue, negative $12.3M free cash flow, 33.6% revenue growth, 0.7% FCF margin, 30.6% gross margin, 3.8% ROIC, but high 420.1% total debt to equity at $28.0B market cap. Exceptional 366.6% 1Y return marks it for high-volatility LITE stock picks.
Key Catalysts
- Revenue growth in data center optics
- Massive 1Y return from AI-driven demand
- Path to FCF positivity
Risk Factors
- Negative FCF and low ROIC
- Elevated debt to equity straining liquidity
- Margin volatility in components
Stock #7: ON Semiconductor Corporation (ON)
| Metric | Value |
|---|---|
| Market Cap | $24.5B |
| Quality Rating | 6.6 |
| Intrinsic Value | $90.0 |
| 1Y Return | 12.4% |
| Revenue | $6,187.8M |
| Free Cash Flow | $1,865.9M |
| Revenue Growth | (16.1%) |
| FCF margin | 30.2% |
| Gross margin | 35.4% |
| ROIC | 10.4% |
| Total Debt to Equity | 45.8% |
Investment Thesis
ON Semiconductor Corporation delivers in autos and industrials with 6.6 Quality rating and $90.0 intrinsic value. Highlights include $6,187.8M revenue, $1,865.9M free cash flow, 16.1% revenue growth (cyclical), 30.2% FCF margin, 35.4% gross margin, 10.4% ROIC, and 45.8% total debt to equity at $24.5B market cap. 12.4% 1Y return supports recovery analysis.
Key Catalysts
- Robust FCF margin for EV chip demand
- Improving revenue trajectory
- Solid ROIC in power semis
Risk Factors
- Recent revenue decline from inventory cycles
- Automotive sector slowdowns
- Moderate debt levels
Stock #8: First Solar, Inc. (FSLR)
| Metric | Value |
|---|---|
| Market Cap | $24.3B |
| Quality Rating | 7.4 |
| Intrinsic Value | $174.3 |
| 1Y Return | 34.7% |
| Revenue | $5,050.6M |
| Free Cash Flow | $614.5M |
| Revenue Growth | 31.2% |
| FCF margin | 12.2% |
| Gross margin | 40.0% |
| ROIC | 16.2% |
| Total Debt to Equity | 6.2% |
Investment Thesis
First Solar, Inc. powers renewables with 7.4 Quality rating and $174.3 intrinsic value. Data shows $5,050.6M revenue, $614.5M free cash flow, 31.2% revenue growth, 12.2% FCF margin, 40.0% gross margin, 16.2% ROIC, low 6.2% total debt to equity, $24.3B market cap, and 34.7% 1Y return for solar stock picks.
Key Catalysts
- Strong revenue growth from utility-scale solar
- Clean balance sheet with low debt
- Attractive ROIC in green energy
Risk Factors
- Policy dependence on subsidies
- Commodity price swings
- Capacity ramp risks
Stock #9: Waters Corporation (WAT)
| Metric | Value |
|---|---|
| Market Cap | $22.0B |
| Quality Rating | 6.2 |
| Intrinsic Value | $246.2 |
| 1Y Return | -11.2% |
| Revenue | $3,105.6M |
| Free Cash Flow | $602.3M |
| Revenue Growth | 6.9% |
| FCF margin | 19.4% |
| Gross margin | 59.0% |
| ROIC | 18.5% |
| Total Debt to Equity | 56.9% |
Investment Thesis
Waters Corporation leads analytics instruments with 6.2 Quality rating and $246.2 intrinsic value. Metrics: $3,105.6M revenue, $602.3M free cash flow, 6.9% revenue growth, 19.4% FCF margin, 59.0% gross margin, 18.5% ROIC, 56.9% total debt to equity, $22.0B market cap, despite -11.2% 1Y return.
Key Catalysts
- High gross margin from life sciences tools
- Steady revenue growth and FCF
- ROIC supporting margins
Risk Factors
- Negative 1Y return from market headwinds
- Elevated debt to equity
- R&D spend pressures
Stock #10: NetApp, Inc. (NTAP)
| Metric | Value |
|---|---|
| Market Cap | $19.5B |
| Quality Rating | 6.9 |
| Intrinsic Value | $133.9 |
| 1Y Return | -21.3% |
| Revenue | $6,635.0M |
| Free Cash Flow | $1,598.0M |
| Revenue Growth | 2.5% |
| FCF margin | 24.1% |
| Gross margin | 70.3% |
| ROIC | 29.8% |
| Total Debt to Equity | 252.1% |
Investment Thesis
NetApp, Inc. provides data management with 6.9 Quality rating and $133.9 intrinsic value. Features $6,635.0M revenue, $1,598.0M free cash flow, 2.5% revenue growth, 24.1% FCF margin, 70.3% gross margin, 29.8% ROIC, but 252.1% total debt to equity at $19.5B market cap. -21.3% 1Y return offers rebound potential.
Key Catalysts
- Industry-leading gross margin in storage
- High ROIC and FCF generation
- Cloud transition opportunities
Risk Factors
- Negative 1Y return and slow growth
- High debt to equity
- Competition in data infrastructure
Portfolio Diversification Insights
This top 10 stock watchlist balances tech (ASML, UI, NTAP ~50%), healthcare/biotech (RMD, NTRA, WAT ~25%), telecom/photonics (NOK, LITE ~15%), semis/autos (ON ~5%), and renewables (FSLR ~5%). High-ROIC leaders like UI 94.7% complement steady FCF generators like ASML and RMD, reducing sector-specific risks. Cross-references include semi ecosystem synergies (ASML-ON-LITE) and growth contrasts (UI-NTRA vs. stable WAT-NTAP), enabling portfolio diversification across best value stocks for resilient exposure.
Market Timing & Entry Strategies
Consider positions during sector dips, such as post-earnings for high-revenue growth names like UI or NTRA, or when macro tailwinds like AI/renewables strengthen. Dollar-cost average into undervalued picks (e.g., ASML, FSLR) showing intrinsic value gaps, monitoring ROIC trends and FCF margins for confirmation. Track 1Y returns for momentum shifts, entering on pullbacks in cyclical plays like ON or LITE.
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FAQ Section
How were these stocks selected?
These 10 best stock picks were chosen via Value Sense's machine learning screens focusing on Quality ratings >5.7, high intrinsic value upside, strong ROIC, FCF margins, and sector diversity in tech/healthcare for undervalued stocks to buy.
What's the best stock from this list?
ASML leads with the highest 7.8 Quality rating, 93.4% 1Y return, and 28.2% ROIC, but UI's 94.7% ROIC makes it a close contender for growth-oriented analysis.
Should I buy all these stocks or diversify?
Diversify across sectors like semis (ASML), healthcare (RMD), and solar (FSLR) to balance risks, using this stock watchlist as educational starting points rather than all-in allocations.
What are the biggest risks with these picks?
Key concerns include high debt (LITE 420.1%, NTAP 252.1%), negative metrics (NTRA ROIC, LITE FCF), and cyclical revenues (ON -16.1%, NOK -1.7%), alongside market volatility.
When is the best time to invest in these stocks?
Target entry on dips tied to intrinsic value discounts, positive revenue growth catalysts, or sector recoveries, monitoring FCF and ROIC for sustained strength in investment opportunities.