Buy 5 Non-Tech U.S. Giants Witnessing Initial Breakthrough in 2026

Wall Street started 2026 on a positive note after witnessing a massive bull run in the last three years. A large section of market participants is hopeful that this northward journey of U.S. stock markets will continue this year, too. 

However, U.S. stock markets have seen fluctuations in February due to concerns over artificial intelligence (AI) trade. Investors have been rotating out of tech stocks on growing concerns over the downsides of AI stocks. 

At this stage, it should be prudent to invest in stocks of U.S. giants (market capital > $30 billion) with a favorable Zacks Rank that are flying high year to date. Five such stocks are: The Hershey Co. HSY, Tapestry Inc. TPR, FedEx Corp. FDX, Howmet Aerospace Inc. HWM and Southwest Airlines Co. LUV. 

Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our five picks year to date.

The Hershey Co.

Zacks Rank #1 Hershey is focused on strengthening innovation, supply-chain agility and commercial execution as it expands its presence across the snacking category. HSY is supported by strong pricing discipline, a successful innovation pipeline and solid growth in salty snacks. 

Hershey is progressing through a multi-year transformation that modernizes and integrates its supply chain, strengthens commercial capabilities, and enhances demand forecasting and execution. HSY highlighted upgrades across procurement, production, distribution and commercial planning, supported by investments in data, analytics and digital tools.

HSY’s retail takeaway improved across core categories, reflecting better shelf execution and effective brand investment. Management expressed confidence in returning to its long-term growth algorithm in the following year.

Hershey has an expected revenue and earnings growth rate of 4.4% and 27.1%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 15.9% over the last 30 days. HSY has a current dividend yield of 2.62%.

Tapestry Inc.

Zacks Rank #1 Tapestry continues to strengthen its position as a leading global house of brands, driven by the strong performance of Coach. The core brand is effectively attracting Gen Z consumers, achieving growth in both unit volume and pricing power. This demand, along with a more focused portfolio after the strategic divestiture of lower-margin segments, is fueling TPR’s gross margin expansion and strong operating leverage. 

TPR’s adjusted gross margin rose 110 basis points in the second quarter of fiscal 2026. International markets, especially Greater China and Europe, are providing further opportunities for sustained growth. 

Supported by a strong balance sheet and higher capital returns, TPR is effectively resetting its earnings base. Management has raised its fiscal 2026 view, projecting revenues above $7.75 billion and EPS between $6.40 and $6.45.

Tapestry has an expected revenue and earnings growth rate of 9.6% and 23.7%, respectively, for the current year (ending June 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 12.9% over the last 30 days. TPR has a current dividend yield of 1.02%.

FedEx Corp.

Zacks Rank #2 FedEx is realigning its costs under a companywide initiative called DRIVE, given post-COVID business adjustments. These initiatives resulted in annual cost savings of $2.2 billion in fiscal 2025. FDX continues paying dividends and buying back shares. 

FDX returned $4.3 billion to its shareholders through dividends and buybacks during fiscal 2025, surpassing its target of $3.8 billion. While near-term challenges stemming from tariffs persist, it is important to recognize that FDX’s strong brand and extensive network position it to generate steady cashflows.

FedEx has an expected revenue and earnings growth rate of 5.6% and 1.5%, respectively, for the current year (ending May 2026). The Zacks Consensus Estimate for the current year’s earnings has improved 0.1% over the last 30 days. FDX has a current dividend yield of 1.49%.

Howmet Aerospace Inc.

Zacks Rank #2 Howmet Aerospace is benefiting from solid momentum in the commercial aerospace market, driven by robust build rates and wide-body aircraft recovery. HWM is also witnessing strength in its defense aerospace business on the back of rising U.S. & international defense budgets. 

Robust orders for engine spares for the F-35 program and other legacy fighters augur well for HWM’s defense aerospace unit. Given the strength in most of its served markets, HWM has built a sound liquidity position that supports its shareholder-friendly policies.

Howmet Aerospace has an expected revenue and earnings growth rate of 11% and 20.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 2% over the last seven days. HWM has a current dividend yield of 0.19%.

Southwest Airlines Co.

Zacks Rank #1 Southwest Airlines has been benefiting from an improvement in air travel demand. Given that travel demand remains healthy, LUV is hopeful that solid revenue trends and tactical initiative performance will continue into 2026. 

As part of its growth strategy, LUV is focused on its cost-cutting initiatives and fleet-modernization techniques. LUV's liquidity position is also encouraging. A solid balance sheet allows LUV to reward its shareholders through share buybacks and dividend payments. 

We believe that the positives surrounding LUV stock outweigh the concerns of production delays at Boeing and escalated labor and airport costs. LUV is clearly benefiting from its revenue management actions, which include network optimization and capacity moderation, as well as marketing and distribution evolution.

Southwest Airlines has an expected revenue and earnings growth rate of 12.8% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 23.6% over the last 30 days. LUV has a current dividend yield of 1.38%.

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This article originally published on Zacks Investment Research (zacks.com).

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