2026 Comeback Picks: 3 S&P Laggards Poised to Break Out

There are no sure things in investing. However, reliable patterns can help investors make informed decisions. One such pattern is that stocks that underperform a market index in one year tend to outperform in the following year.

That may seem simplistic, but experienced traders know that the trend is often their friend. The same can apply to long-term investors. Applying the concept of buying low and selling high can unlock asymmetric opportunities in sectors that have fallen out of favor. 

Still, investors should demand more than a contrarian narrative. In this case, several macroeconomic and sector-specific signals suggest that 2026 could be a comeback year for some of 2025’s biggest losers.

• Many AI stocks have stretched multiples; meanwhile, cyclical stocks look undervalued
• Election spending accelerates ad budgets
• Rate cuts reposition financial and payments leadership

If history repeats itself, the bottom quartile of 2025 performance may drive the top quartile of 2026 results. Here are three stocks to consider.

Fiserv: Waiting on the Rate Cycle

Fiserv Inc. (NASDAQ: FISV) is down 67% in 2025, trading at 2017 levels despite relatively stable fundamentals. Revenue and earnings are flat to slightly lower year-over-year (YOY), but not alarmingly so. 

Rather, the reason for the sharp drop is a rotation away from payment networks and into financial stocks that covered artificial intelligence, cryptocurrency rails, and buy now pay later solutions.

But Fiserv remains a key player with sticky banking software revenue, deep merchant penetration, and strong free cash flow.

Fiserv's potential for a recovery may hinge on more aggressive rate cuts, as history shows that payment volume and transaction growth both accelerate when monetary policy gets easier for consumers.

FISV stock looks fundamentally undervalued with a forward price-to-earnings (P/E) ratio around 6.4x. Analysts project 16.9% earnings growth in the next 12 months, assigning FISV a consensus price target of $121.08, which would represent upside of 82%.

The Trade Desk: Ad Cycle Reset = Rebound Setup

The Trade Desk Inc. (NASDAQ: TTD) is down 66% in 2025 and over 70% in the last 12 months, but the reasons are murky. Ad revenue may be softening, but the company’s revenue came in 18% higher YOY in its latest earnings report, suggesting the business is performing better than the stock price implies.

The Trade Desk is seeing significant adoption of its AI platform, Kokai. Also, the company’s connected TV business continues to be its fastest-growing channel.

Fueling the bull case, the stock is trading around its 2020 level, but revenue has more than tripled. That's a textbook case of asymmetric risk-reward.

Analysts expect the company’s earnings to increase by 35% in the next year. That supports a consensus price target of $76.88 on TTD stock, which would represent 95% upside.

Deckers Outdoor: Earnings Strength Hiding Under Rotation

Deckers Outdoor Corp. (NYSE: DECK) is the “best” of this bunch—in the sense that DECK stock has only dropped about 50% in 2025. The decline appears to be more about capital rotation into AI-focused growth stocks than any fundamental issue.

However, investors may not be taking into account Deckers' revenue and earnings per share (EPS), which have been growing YOY.

Much of that is attributable to the company's HOKA brand, which continues to outgrow the footwear category, and the company’s margins remain among the best in premium discretionary apparel.

From a sector perspective, consumer discretionary stocks often exhibit sharp rebounds after down years. Deckers’ fundamentals support that historical trend.

Analysts have a consensus price target of $117.58 on DECK stock, which is about 16% above the stock’s closing price on Dec. 9. That aligns with projected earnings growth of over 12% in the next 12 months.

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