9 Discounted Stocks That Could Outperform in a Value Rotation | Investing.com

• The S&P 500 remains near record highs, but 2026 gains are increasingly concentrated in a handful of tech stocks that appear significantly overvalued.
• Several major U.S. stocks have suffered sharp declines this year, potentially creating opportunities as investors rotate into other sectors.
• Discover 9 US stocks that combine attractive valuations with solid fundamentals and strong upside potential.

The remains close to its all-time highs, largely driven by a small group of technology stocks that have surged since the start of the year.

Several semiconductor and data storage names, including SanDisk and Micron Technology, have gained more than 100% in 2026 as enthusiasm around AI infrastructure continues to fuel the sector. Overall, around 15 S&P 500 stocks have more than doubled this year, with most of the gains concentrated in AI and memory chips.

This concentration raises an important question: do these market leaders still have meaningful room to run, or have their valuations already priced in much of the optimism? After gains of several hundred percent in just a few months, elevated multiples can leave increasingly limited upside.

At the other end of the market, several laggards have suffered steep declines. Intuit, CoStar Group, and Trade Desk have fallen between 50% and more than 60% this year, amid weaker growth expectations and competitive concerns. While some of these declines reflect genuine deterioration in fundamentals, others may have been amplified by a market heavily focused on AI and its biggest winners.

Why Past Performance Is No Guarantee of Future Results

Historically, bull markets often bring periods of sector rotation, as stocks that have led the rally pause while neglected areas of the market attract fresh investor interest. With the S&P 500 near record highs and a small group of tech stocks accounting for much of this year’s gains, such a rotation could emerge in the coming months.

That does not mean every stock that has fallen sharply is automatically a buying opportunity. Declines can reflect legitimate concerns such as slowing growth, weaker profitability, or a deteriorating business model. For that reason, the size of a stock’s decline should be assessed alongside two other factors.

First is valuation. A beaten-down stock should also appear undervalued according to established measures such as InvestingPro Fair Value, which combines several valuation models, and analysts’ average price targets.

The second is financial strength. The InvestingPro Financial Health Score evaluates more than 100 factors across five dimensions, while the Piotroski Score measures accounting and operational strength on a scale of 0 to 9. Combining an attractive valuation with solid financial health and a strong Piotroski Score can help distinguish genuine opportunities from potential value traps.

These US Stocks Have Been Punished This Year, but Still Boast Solid Fundamentals

We used the Investing.com screener to identify U.S. large-cap stocks that have suffered sharp declines this year but continue to show solid fundamentals and meaningful upside potential, based on the following criteria:

• A decline of more than 25% year-to-date (YTD)
• Market capitalization greater than $10 billion
• Upside potential of more than 25% based on InvestingPro Fair Value
• Upside potential of more than 25% based on the average analyst price target
• Stocks covered by at least 10 analysts
• InvestingPro Financial Health Score above 2.5/5
• Piotroski score of 6 or higher

This research has allowed us to identify 9 stocks:

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Specifically, these US stocks have fallen by 26% to 54.9% since the start of the year, while offering upside potential of 27.1% to 64.4% based on Fair Value and 28.5% to 88.3% based on the analyst consensus.

Among these stocks are:

• Las Vegas Sands () highlights the disconnect between market sentiment and underlying operating strength. The stock is down 28.6% in 2026 after second-quarter EPS of $0.53 and revenue of $3.15 billion both fell short of expectations. Net income declined 28%, reflecting weaker VIP gaming activity and the impact of the World Cup. Still, management returned $787 million to shareholders through buybacks during the quarter and maintained its $0.30 quarterly dividend. Fair Value points to 31.4% upside, while the analyst consensus implies 31.3%, offering a potentially attractive risk/reward profile ahead of third-quarter results expected in late October.
• Copart () has fallen 26% this year amid concerns over a change in leadership, even as its underlying business remains resilient. The vehicle auction specialist reported fiscal third-quarter EPS of $0.43, ahead of consensus, while revenue rose 2.1% to $1.24 billion. International revenue grew 14.1%, while US insurers achieved record selling prices. Sentiment was weighed down by Jay Adair’s return as CEO in late July, replacing Jeff Liaw. Yet the company remains debt-free, while Fair Value implies 27.1% upside and the analyst consensus points to 41.4%. The next earnings report is expected on September 9.However, many other stocks on the list offer more attractive profiles, particularly in terms of valuation.

Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of any assets and does not constitute an offer, solicitation, recommendation, or advice to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky; therefore, any investment decision and the associated risk are the sole responsibility of the investor. Additionally, we do not provide any investment advisory services.