NEW YORK, December 30, 2025 – Investors are already eyeing 2026, adn a key debate is brewing: chase the winners or bet on a comeback? Nine stocks that soared more than 30% this year are now flagged as carrying a downside risk exceeding 20%, according to estimates.
Momentum vs. Value: navigating the 2026 Market
Investors are weighing strategies as the year closes, deciding whether to ride current market trends or seek undervalued opportunities.
- Some investors favor “momentum” stocks – those that have recently performed well – hoping for continued gains.
- Others prefer “value” investing, seeking out stocks that appear undervalued and poised for a rebound.
- A recent analysis reveals that even high-performing stocks can be overvalued,presenting potential risks.
Expectation for stocks that have already surged? Among the 102 stocks that have risen over 30% since the start of the year, nine are currently estimated to have a potential downside of more than 20%.
Specifically, several S&P 500 stocks, having increased between 51.7% and 149.5% this year, are now considered overvalued by approximately 25.4% to 45.7%, based on Fair Value estimates. “Fair Value” is a tool that combines multiple valuation models to estimate a stock’s intrinsic worth, indicating whether it’s trading above or below its fundamental value.
Quick fact: Fair value models aren’t a crystal ball, but they offer a data-driven outlook on potential overvaluation or undervaluation.
Fortunately, the picture isn’t entirely bleak for momentum traders. Fair Value also identifies S&P 500 stocks that have already delivered impressive gains this year and still appear to have room to run.
an analysis identified seven stocks within the S&P 500 that have already gained more than 30% in 2025 and still show an upside potential exceeding 20%, according to Fair Value estimates. These stocks have risen between 30.8% and 84.9% year-to-date, yet models suggest they coudl climb another 20.3% to 29.5%.
That makes them compelling options for momentum investors seeking strong ideas for the coming year.
For those leaning towards a value-focused approach, opportunities abound within the S&P 500 and beyond. Screeners can easily pinpoint companies trading at attractive valuations, using pre-set filters to highlight potential bargains.
It’s important to note that some advanced search features are reserved for subscribers with a PRO+ plan.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. All assets carry risk, and investment decisions should be made with careful consideration of individual circumstances.