5 of the Top Undervalued Stocks of 2021

01 December 2025

Picking the best stocks 2026 requires more thought than simply buying stocks that are popular and often in news titles. The market environment heading into 2025 is influenced by three powerful forces operating simultaneously: artificial intelligence is becoming increasingly relevant in real-world business, interest rates are likely to remain higher than the average of the 2010s, and corporate profits are becoming more concentrated among companies with data and pricing power.
This combination favors companies with robust competitive advantages, not short-term hype. The best stocks 2026 investors will be those that can grow earnings even if economic growth slows, rates stay elevated, or capital becomes selective.
Below, we will focus on stocks with the best potential in 2026, backed by real-world revenue, profit margins, and long-term demand. We will analyze true potential stocks without hype, as this is how every serious enough investor should approach stock markets in 2026.

How this list was developed and what we avoided

The list of the best stocks to buy in 2026 was developed by following three main criteria: clear long-term potential (AI, healthcare innovation, digital infrastructure, etc.), strong and improving free cash flow (loans are smaller than cash), market leadership, and pricing power. There are also some other minor criteria to ensure this list contains very robust companies across diverse industries, ensuring diversification.

What this list avoids

To ensure only serious picks with long-term potential, we avoided:

Meme stocks and sentiment-driven equities
Companies dependent on hype
Businesses with weak balance sheets are relying on cheap debt

Our goal here is not to predict anything, but rather to put emphasis on projects with robust business revenue and products or services, ensuring only triple-A investment stocks are picked.

Artificial intelligence: Core driver behind the most promising 2026 stocks

AI is the main trend of this year. It is transforming how companies build software, run operations, manage big data, and compete with one another. However, not every company that incorporates AI into its name will benefit, as most of these companies are merely hype and do not possess a genuine competitive advantage. The biggest winners in this sector are companies selling infrastructure, compute, and critical tools, rather than applications and empty promises.

NVIDIA (NVDA): The foundation of modern AI

We open our list of the best stocks to buy in 2026 with Nvidia. We live in times when major RAM manufacturer Micron is pulling its Crucial brand out of the consumer market (PC RAM, SSDs) to fully focus on the booming, high-profit AI sector. The main player in the AI sector that powers everything? NVIDIA: a major GPU producer in the world. It produces cheap and crucial AI startups, including ChatGPT and Gemini. NVIDIA powers this technology, and it is going to be in this position for years to come.

Why Nvidia still matters in 2026:

Data centers continue to expand with more advanced and complex algorithms requiring even more advanced GPU infrastructure
Training large models requires enormous amounts of computing power, and Nvidia is at the forefront of this sector
NVIDIA’s CUDA cores lock developers into its hardware, providing nearly unparalleled processing power for modern AI and machine learning applications

Even as competitors exist like AMD, Nvidia's competitive advantage is not only its advanced chips, but also the software-hardware combination that makes it costly to switch to other suppliers.

Revenue growth may slow down as the company is already valued in trillions of dollars, but many analysts still expect a more bullish trend, as the AI industry is still building infrastructure for advanced AI servers.

Broadcom (AVGO): AI hyperscale solutions

Broadcom is not as popular or well-known as Nvidia, but it is also among the best stocks for the next year because many institutional investors are interested in its promising future. Broadcom's strength comes from two important areas, including custom AI chips for hyperscale cloud providers and high-margin networking and connectivity hardware. Cloud computing, especially for AI infrastructure, will be more relevant in the future as it reduces costs while providing incredible flexibility for startups to start ideas on a budget. Unlike many chip companies, Broadcom does not rely on one product alone. It has a revenue based on diversified streams like semiconductors, software, and enterprise infrastructure, ensuring long-term relevance for stock investors.

The company has a strong free cash flow generation, long-term contracts with major cloud services providers, and returns capital through dividends and buybacks, increasing attractiveness for long-term investors. Investors who focus on growth without extreme volatility might be looking for stocks like this.

Taiwan Semiconductor Manufacturing (TSMC): The company behind all modern chips

The best stocks to buy in 2026 would not make sense without this one important company. Every advanced chip needs to be manufactured somewhere, and for the most advanced nodes, that somewhere is almost always TSMC. The company does not design chips; it manufactures them for companies like Nvidia, AMD, Apple, Qualcomm, and so on. There is a 99% probability that the device you are using to read this list uses TSMC’s advanced technology.

Why TSMC belongs among the best stocks 2026:

Major share in advanced chip manufacturing
Extremely high barriers to entry
Long-term demand is robust

The company competes in a field where it takes years to advance and come out with the next-gen technology, and it is nearly impossible to beat TSM in its game. This was proven several times when China tried to catch up with its chips but failed.

Even if individual chip designers struggle, the overall need for advanced manufacturing remains strong and growing, making TSMC more resilient than many other tech names.

Beyond chips: Growth that does not depend on AI hype

While AI dominates 2025 headlines and is most likely to continue so in 2026, some of the best stocks with the best potential in 2026 operate in sectors where demand is driven by demographics, health, and long-term consumption demand.

Eli Lilly (LLY): Healthcare Growth With Pricing Power

Eli Lilly is among the most discussed pharmaceutical companies in recent years, and there are several good reasons for it. Its leadership in diabetes and weight-loss treatments has influenced its growth profile positively. Since millions of people suffer from diabetes and are overweight globally, the company has a lot of market share to conquer. These are not just niche drugs; they address massive, long-term health challenges.

Why is Eli Lilly one of the best stocks for next year?

Strong demand, which is extremely unlikely to slow down
Pricing power is supported by the drug's effectiveness
Expanding beyond current popular drugs

Healthcare also provides a defensive element against crises and economic challenges. Even in slower economic environments, demand for high-quality, effective drugs never slows down as people always try to underspend on their health challenges. For investors seeking growth with stability, Eli Lilly offers a rare combination.

Advanced Micro Devices (AMD): The Challenger With Momentum

AMD is among the few companies to challenge several major players in its industry. It is competitive for both Intel CPUs and Nvidia GPUs and is focused on both retail consumers and server-grade CPU infrastructure. The company sits in a unique position. The company also maintains exposure to gaming and consumer markets while selling advanced Ryzen CPUs for server-grade equipment. Its GPUs are more than capable of handling large AI models and gaming demands. While not as powerful as Nvidia, AMD is a very good option for gamers for their middle-range builds, mainly due to low cost high performance gaming video cards.

AMD’s appeal as one of the stocks with the best potential in 2026 comes from several sources:

Improving competitiveness in the AI sector
Expanding data center presence globally
Flexible product offerings

AMD might not dominate AI training the way Nvidia does, but it is capable of running AI models at scale and is expected to grow rapidly. For investors, AMD remains a compelling choice because its products sell well across the globe and provide gamers and AI servers a robust product choice for both CPUs and GPUs.

Semiconductor equipment: Profiting from the entire ecosystem

When chip demand rises, manufacturers spend more on equipment. This makes semiconductor equipment companies generate more revenue indirectly from AI hype. Let’s list some of the best stocks to buy in 2026, which are indirect beneficiaries of all this AI hype.

Lam Research (LRCX): Infrastructure for the Chip Boom

Lam Research supplies essential equipment used in chip fabrication. Its customers are the world’s largest semiconductor manufacturers. The company is not well-known or popular, but powers all the advanced chip manufacturing behind the scenes. The main reasons why this stock is promising include:

Revenue is tied to long-term expansion
High switching costs for customers
Strong operating margins

Even if chip demand fluctuates from year to year, the long-term need for more advanced manufacturing supports Lam’s business model.

Consumer Innovation: Growth Outside Traditional Tech

Not all the best stocks to buy in 2026 come from technology or healthcare sectors. Some companies have been operating in the retail products sector for years, where demand is robust and ensures consistent revenue generation and growth.

SharkNinja (SN): Consumer Products With Brand Power

SharkNinja is a brand focused on household appliances and consumer products, but it is distinct from other companies in the same sector because of its innovation speed and brand recognition. SharkNinja is worth watching in 2026 because it has a strong product development cycle, is expanding to other markets, and its revenue is constantly growing. Stocks of companies that operate in consumer sectors are sometimes overlooked by investors, but companies that always innovate can outperform even in mixed economic conditions, and SharkNinja could be among the one of the most robust stock picks for the next year.

Cloud and Platform Giants: Quiet Compounding Machines

Mega-cap technology companies do not double overnight, but they offer steady, stable, and reliable growth driven by scale and experience.

Microsoft

While not always among high-growth anymore, cloud and platform leaders remain essential for global digital infrastructure. Microsoft’s Windows powers millions of desktop and laptop computers worldwide, and its reach goes beyond the operating system. It offers software solutions such as Microsoft Office, Project, and much more. It has reached in the gaming industry as well, and the company is heavily invested in AI and OpenAI ChatGPT, ensuring its long-term relevance.

Alphabet

Google has been a dominant player so far and is poised to continue it in 2026 as the company releases newer versions of Gemini and other AI products with ever more advanced algorithms. When it comes to big data analysis, very few companies compare to Google, as it collects vast amounts of digital data and can employ it in AI training to offer even more refined products. Its latest generation of AI products gives a glimpse of how the company will continue to position itself strongly in AI and other digital sectors.

Overall, these companies benefit from AI without relying entirely on chip sales, which enables them to become strong diversification tools in the hands of tech-savvy investors in 2026.

Risks investors should not ignore in 2026

The most promising 2026 stocks offer very attractive potential in 2026, but investors should be aware of the risks present. Ignoring these risks leads to poor portfolio construction.

Key risks to consider

The main risks when entering into stock investing in 2026 are:

If earnings growth slows down, the stock price might slow down
AI spending could become more selective
Geopolitical issues could continue to disrupt supply chains
Regulatory pressure could be increased for large tech firms

To counter these challenges, investors do not need to avoid investing in the best stocks to buy in 2026; they need to properly diversify their portfolios, ensuring they are not exposed to one single sector.

A practical portfolio of the most promising 2026 stocks

The best approach for the year ahead is to build a balanced portfolio to ensure the revenue is stable. Avoiding exposure to a single sector is the best practice. Here is how to build the best portfolio in 2026 according to our list of stocks:

Core AI exposure: Nvidia, Broadcom
Manufacturing backbone: TSMC, Lam Research
Healthcare growth: Eli Lilly
Robust growth: AMD
Stability and scale: Microsoft, Alphabet, or both

This mix spreads risks across a basket of different stocks while maintaining the highest potential to be exposed to growth stocks in 2026.

In the end, the best stocks to add to your portfolio in 2026 are not defined by hype or short-term price action. They are defined by strong demand, robust economics, and real competitive advantages. AI will continue to influence markets, but healthcare innovation, semiconductor infrastructure, and platform businesses remain equally important. Investors should focus on fundamentals rather than noise to better position themselves to benefit from the next phase of market growth in 2026. The most promising 2026 stocks are those that can grow earnings regardless of economic conditions, build around quality, and let compounding do its job.