On January 5, Reuters reported that many analysts believe global investors will actively look for opportunities in undervalued areas of the financial markets in 2026. Rising worries about a possible AI bubble are pushing investors to move away from highly valued tech stocks and search for value in other areas.
According to strategists at BlackRock Investment Institute, the environment is “ripe for active investing.”
US stock markets were volatile in 2025, falling near bear market levels in April after President Trump announced tariffs. However, the markets recovered later and reached record highs. Analysts expect this positive momentum to continue into 2026 but also noted that investors will need to be more selective when picking stocks.
US small-cap stocks could also return to the spotlight after being on the sidelines for years. Improving earnings prospects and lower borrowing costs are expected to support this. Oren Shiran, portfolio manager at Lazard Asset Management, said:
“The big difference going into 2026 is that we finally are seeing earnings growth come back into small caps.”
Jefferies equity strategist Steven DeSanctis also forecasts that the Russell 2000 index, which tracks small-cap stocks, to rise and reach 2,825 points by the end of 2026. This would represent an increase of nearly 14% from 2025 levels.
With this background in mind, let’s take a look at the 12 stocks that will bounce back according to Wall Street analysts.
Our Methodology
To compile our list of the 12 stocks that will bounce back according to Wall Street analysts, we looked for stocks that have lost at least 30% in the last 6 months as of January 7, 2026. To find stocks that will bounce back, we narrowed down our selection by looking for stocks that analysts believe will gain at least twice as much as they have lost in the last 6 months. Finally, we ranked the stocks based on their average price target upside potential according to analysts as of January 7, 2026.
Additionally, we mentioned the hedge fund sentiment surrounding each stock, which was taken from Insider Monkey’s Q3 2025 database of 978 elite hedge funds.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
12 Stocks that Will Bounce Back According to Wall Street Analysts
12. Five9, Inc. (NASDAQ:FIVN)
6-Month Performance: -31.55%
Average Price Target Upside Potential According to Analysts: 75.53%
Number of Hedge Fund Holders: 36
Five9, Inc. (NASDAQ:FIVN) ranks among the stocks that will bounce back according to Wall Street analysts. On January 5, Piper Sandler downgraded its rating on Five9, Inc. (NASDAQ:FIVN) from Overweight to Neutral and lowered its price target from $26 to $21.
The firm acknowledged that Five9, Inc. (NASDAQ:FIVN) shares look attractive based on valuation and risk-reward. However, the company has room to improve its free cash flow. Piper Sandler also noted that the company is slowly gaining share in the broader customer experience market.
The research firm raised concerns about Five9, Inc. (NASDAQ:FIVN) not gaining market share in the Contact Center as a Service (CCaaS) segment. The company is facing positioning challenges in the upmarket segment and is also dealing with rising competition.
Piper Sandler also noted that Five9, Inc.’s (NASDAQ:FIVN) revenue growth has decelerated to below 10%. While the company’s management has shared an outlook for 2026 that suggests growth could accelerate again to above 10% in the second half of 2026, the firm believes this improvement will likely take time to materialize.
Previously, on December 18, DA Davidson also reaffirmed its Neutral rating on Five9, Inc. (NASDAQ:FIVN) with a price target of $24 after the company announced a new CEO. Da Davidson sees the new CEO, Amit Mathradas, as a “positive addition.” The firm highlighted his experience in scaling businesses internationally and driving product innovation.
Five9, Inc. (NASDAQ: FIVN) is a leading provider of call center solutions. With its Intelligent CX Platform, the company helps businesses manage customer interactions for enhanced customer experience (CX) and agent efficiency.
11. Surgery Partners, Inc. (NASDAQ:SGRY)
6-Month Performance: -30.12%
Average Price Target Upside Potential According to Analysts: 79.03%
Number of Hedge Fund Holders: 30
Surgery Partners, Inc. (NASDAQ:SGRY) ranks among the stocks that will bounce back according to Wall Street analysts. On December 19, RBC Capital reiterated its Buy rating on Surgery Partners, Inc. (NASDAQ:SGRY) with a price target of $31 on the stock. The research firm believes that the company’s long-term growth prospects are still intact.
Earlier, on December 18, Mizuho Securities reduced its price target on Surgery Partners, Inc. (NASDAQ:SGRY) from $22 to $19 but kept its Outperform rating on the shares. This update was part of the research firm’s 2026 outlook for managed care and health facilities.
Mizuho Securities believes that 2026 will prove to be a “pivotal year” for the sector. The firm noted that the sector is coming out of a three-year negative underwriting cycle. The firm’s analyst told investors in a research note that margins are expected to improve across commercial insurance, Medicaid, and Medicare over the coming years. Even after lowering its price target on Surgery Partners, Inc. (NASDAQ:SGRY), Mizuho Securities remains positive on managed care heading into 2026.
Surgery Partners, Inc. (NASDAQ:SGRY) is a leading healthcare services company that operates a network of more than 200 locations in 30 states, including ambulatory surgery centers, surgical hospitals, multi-specialty physician practices, and urgent care facilities.
10. Alvotech (NASDAQ:ALVO)
6-Month Performance: -47.11%
Average Price Target Upside Potential According to Analysts: 114.59%
Number of Hedge Fund Holders: 12
Alvotech (NASDAQ:ALVO) ranks among the stocks that will bounce back according to Wall Street analysts. On December 31, Alvotech (NASDAQ:ALVO) reported that it has secured a $100 million senior term loan facility that will mature in December 2027. This financing will strengthen the company’s liquidity and support the execution of its strategic priorities in 2026.
Led by GoldenTree Asset Management, this transaction will provide Alvotech (NASDAQ:ALVO) with funding from investors who are confident in the company’s ability to execute and the commercial potential of the company’s pipeline of biosimilar products. The company is focused on advancing its research and development efforts, with 30 biosimilar products currently in development. Alvotech (NASDAQ:ALVO) also aims to expand its production capacity and enhance its supply chain to support four new global product launches planned through 2026.
Previously, on December 8, Barclays initiated coverage on Alvotech (NASDAQ:ALVO) with an Underweight rating and a price target of $5. The firm launched coverage of the specialty pharmaceuticals sector with a Neutral view overall. Barclays noted that investor sentiment is improving as companies focus on innovation, growing margins, and de-leveraging.
The research firm also pointed out that pricing pressures in the sector are easing and leverage levels are declining. According to Barclays, there is “plenty of opportunity” as the industry remains in a “transition phase.”
Alvotech (NASDAQ:ALVO) is a biotechnology company that specializes in the development and manufacture of biosimilar medicines for patients worldwide.
9. Telix Pharmaceuticals Limited (NASDAQ:TLX)
6-Month Performance: -52.20%
Average Price Target Upside Potential According to Analysts: 123.18%
Number of Hedge Fund Holders: 2
Telix Pharmaceuticals Limited (NASDAQ:TLX) ranks among the stocks that will bounce back according to Wall Street analysts. On December 30, TD Cowen lowered its price target on Telix Pharmaceuticals Limited (NASDAQ:TLX) from AUD 35 to AUD 25 but kept its Buy rating on the stock.
Earlier, on December 14, RBC Capital also initiated coverage on Telix Pharmaceuticals Limited (NASDAQ:TLX), assigning the stock a Sector Perform rating and setting the price target at AUD 17. The firm noted that Telix Pharmaceuticals Limited (NASDAQ:TLX) is a radiopharmaceutical company that has successfully commercialized two diagnostic products for prostate cancer. The company has significant potential to expand into other indications.
The research firm highlighted the company’s extensive portfolio and pipeline of assets in urology, neurology, musculoskeletal, and hematologic oncology, which the company is making efforts to commercialize.
While RBC Capital acknowledges these opportunities, it expects Telix Pharmaceuticals Limited’s (NASDAQ:TLX) earnings and free cash flow to remain largely flat between fiscal years 2025 and 2027 as the company focuses on its research and development pipeline.
Telix Pharmaceuticals Limited (NASDAQ:TLX) is a biopharmaceutical company that specializes in therapeutic and diagnostic radiopharmaceuticals and associated medical technologies. The company is focused on developing clinical and commercial stage products to address significant unmet medical needs in oncology and rare diseases.
8. MARA Holdings, Inc. (NASDAQ:MARA)
6-Month Performance: -42.47%
Average Price Target Upside Potential According to Analysts: 128.17%
Number of Hedge Fund Holders: 35
MARA Holdings, Inc. (NASDAQ:MARA) ranks among the stocks that will bounce back according to Wall Street analysts. On December 19, Rosenblatt reduced its price target on MARA Holdings, Inc. (NASDAQ:MARA) from $22 to $15 but kept its Buy rating on the stock.
The firm’s analyst noted that Bitcoin miners have struggled throughout 2025 because of very high network competition. This problem has “gone from bad to worse” after the recent sharp decline in Bitcoin prices. Rosenblatt pointed out that while pure play miners are expected to stay under pressure, companies that are involved in high-performance computing may be less affected because of “entirely uncorrelated and considerably more profitable” opportunities in high-performance computing.
Earlier, on December 17, Reuters reported that crypto mining companies, including MARA Holdings, Inc. (NASDAQ:MARA), have faced setbacks following the recent downturn in the crypto market. These companies had benefited from long-term contracts that provided cheap electricity. However, many are now shifting their focus toward AI data centers for large tech companies.
Matthew Sigel, portfolio manager of VanEck Onchain Economy ETF, pointed out that these stocks “combine two powerful themes: digital assets via their bitcoin exposure and AI.” Sigel also noted that the “macro environment turned a little bit” and these companies got punished.
MARA Holdings, Inc. (NASDAQ:MARA) is an American digital asset technology company that is primarily focused on energy generation and Bitcoin mining.
7. Zai Lab Limited (NASDAQ:ZLAB)
6-Month Performance: -45.54%
Average Price Target Upside Potential According to Analysts: 133.60%
Number of Hedge Fund Holders: 21
Zai Lab Limited (NASDAQ:ZLAB) ranks among the stocks that will bounce back according to Wall Street analysts. On January 6, UBS initiated coverage on Zai Lab Limited (NASDAQ:ZLAB), giving the stock a Buy rating and setting the price target at $35.
The research firm noted that the company is moving beyond its previous focus on China to become a global innovation leader. UBS sees Zai Lab Limited (NASDAQ:ZLAB) as undervalued and pointed out that the market is not fully recognizing the value of its global pipeline, which improves its strategic positioning, diversifies revenue streams, and creates potential long-term value for shareholders.
The firm also noted that this pipeline is shifting towards high-value, innovative treatments aimed at significant unmet needs. According to UBS, this could significantly shape Zai Lab Limited’s (NASDAQ:ZLAB) growth over the next decade.
In other news, on January 6, Zai Lab Limited (NASDAQ:ZLAB) reported that the National Medical Products Administration (NMPA) in China has approved the supplemental New Drug Application (sNDA) for AUGTYRO (repotrectinib). The drug is approved for adult patients with solid tumors that carry a neurotrophic tyrosine receptor kinase (NTRK) gene fusion.
Zai Lab Limited (NASDAQ:ZLAB) is a commercial-stage biopharmaceutical company based in China and the United States. It is focused on discovering, developing, and commercializing therapies that address medical conditions with significant unmet needs in oncology, immunology, neuroscience, and infectious disease.
6. Soleno Therapeutics, Inc. (NASDAQ:SLNO)
6-Month Performance: -47.94%
Average Price Target Upside Potential According to Analysts: 147.80%
Number of Hedge Fund Holders: 58
Soleno Therapeutics, Inc. (NASDAQ:SLNO) ranks among the stocks that will bounce back according to Wall Street analysts. On December 11, LifeSci Capital reiterated its Buy rating on Soleno Therapeutics, Inc. (NASDAQ:SLNO) with a price target of $110 on the stock.
On December 8, Piper Sandler identified Soleno Therapeutics, Inc. (NASDAQ:SLNO) as one of several commercial-stage biotech companies expected to experience transformational growth in 2026. According to a research note following the firm’s three-day Healthcare Conference, discussions with management teams provided clearer insight into upcoming launches and possible approvals.
Piper Sandler expressed improved confidence in these companies, including Soleno Therapeutics, Inc. (NASDAQ:SLNO), and noted that these companies have a solid plan to commence or progress drug launches.
In other news, on January 5, Soleno Therapeutics, Inc. (NASDAQ:SLNO) announced that results from a pivotal study of VYKAT XR were published in the Journal of Clinical Endocrinology and Metabolism (JCEM). The study was a key part of the Phase 3 clinical program, which established the efficacy and safety of the drug. It also supported the drug’s approval by the FDA as the first and only treatment for hyperphagia in people living with Prader-Willi syndrome.
Soleno Therapeutics, Inc. (NASDAQ:SLNO) is a biopharmaceutical company focused on developing novel therapeutics for the treatment of rare diseases.
5. Corcept Therapeutics Incorporated (NASDAQ:CORT)
6-Month Performance: -45.72%
Average Price Target Upside Potential According to Analysts: 156.76%
Number of Hedge Fund Holders: 28
Corcept Therapeutics Incorporated (NASDAQ:CORT) ranks among the stocks that will bounce back according to Wall Street analysts. On January 2, Canaccord Genuity cut its price target on Corcept Therapeutics Incorporated (NASDAQ:CORT) from $140 to $99 but kept its Buy rating on the stock. This adjustment comes after the company reported that the FDA issued a Complete Response Letter regarding the New Drug Application for relacorilant as a treatment for patients with hypertension secondary to hypercortisolism.
Despite this, Canaccord Genuity pointed out that Corcept Therapeutics Incorporated’s (NASDAQ:CORT) Korlym business continues to perform well. The research firm noted that it does not expect genetics to make further inroads in this market segment. Canaccord Genuity sees the recent sell-off in Corcept Therapeutics Incorporated (NASDAQ:CORT) shares after the FDA decision as a buying opportunity for investors, pointing to continued growth prospects for Korlym and its authorized generic version.
On January 2, H.C. Wainwright also lowered its price target on Corcept Therapeutics Incorporated (NASDAQ:CORT) from $145 to $90 and kept its Buy rating. The firm believes that the FDA’s response is now expected to delay the launch of relacorilant for Cushing’s syndrome by about three years, with a new expected launch in the first quarter of 2029.
H.C. Wainwright also noted that the Complete Response Letter does not affect the ongoing FDA review of relacorilant for platinum-resistant ovarian cancer, for which the FDA has assigned a Prescription Drug User Fee Act (PDUFA) date of July 11, 2026.
Corcept Therapeutics Incorporated (NASDAQ:CORT) is a commercial-stage pharmaceutical company focused on developing treatments for a wide range of serious disorders through cortisol modulation.
4. Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE)
6-Month Performance: -38.61%
Average Price Target Upside Potential According to Analysts: 174.79%
Number of Hedge Fund Holders: 55
Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) ranks among the stocks that will bounce back according to Wall Street analysts. On January 6, H.C. Wainwright reduced its price target on Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) from $80 to $60 but kept its Buy rating on the stock. The reduced price target still represents a significant upside from the current price.
This update comes after the company announced that its two pivotal trials for setrusumab in osteogenesis imperfecta (OI), Cosmic and Orbit, did not achieve statistical significance against the primary endpoints. H.C. Wainwright highlighted that while setrusumab was previously seen as an important value driver for Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE), the stock had already been trading at attractive levels before the results of these trials. This indicates that the stock price did not appear to reflect a meaningful contribution from this asset.
The research firm noted that Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) is a diversified, commercial-stage company that has multiple approved products generating revenue and a pipeline of clinical-stage assets. H.C. Wainwright sees this news as “merely a bump in the road” and noted that the current stock price appears to have limited downside risk.
On January 5, Guggenheim also reduced its price target on Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) from $64 to $52 but maintained its Buy rating after the results from the Orbit and Cosmic studies. Guggenheim pointed to the upcoming Phase 3 Aspire study data in Angelman syndrome, expected in the second half of 2026. The firm said that positive results could represent a “watershed moment” for the company.
Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) is a biopharma company focused on developing novel therapies for serious rare and ultra-rare genetic diseases.
3. ARS Pharmaceuticals, Inc. (NASDAQ:SPRY)
6-Month Performance: -34.51%
Average Price Target Upside Potential According to Analysts: 179.28%
Number of Hedge Fund Holders: 28
ARS Pharmaceuticals, Inc. (NASDAQ:SPRY) ranks among the stocks that will bounce back according to Wall Street analysts. On January 2, Roth MKM reiterated its Buy rating on ARS Pharmaceuticals, Inc. (NASDAQ:SPRY) with a price target of $30 on the stock.
In other news, on December 29, ARS Pharmaceuticals, Inc. (NASDAQ:SPRY) reported that China’s National Medical Products Administration (NMPA) has approved neffy 2 mg, an epinephrine nasal spray, for the emergency treatment of Type 1 allergic reactions, anaphylaxis. The approval covers adults and children who weigh at least 30 kilograms.
ARS Pharmaceuticals, Inc. (NASDAQ:SPRY) has an exclusive licensing agreement with Pediatrix Therapeutics, giving Pediatrix the exclusive rights to commercialize neffy in China for severe allergic reactions and certain other conditions like chronic spontaneous urticaria. ARS Pharmaceuticals, Inc. (NASDAQ:SPRY) will receive a final regulatory milestone payment of $4 million and expects to receive up to $80 million in additional sales-based milestone payments. The company is also entitled to receive tiered royalties in the low double-digit range based on annual net sales.
According to the report, ARS Pharmaceuticals, Inc. (NASDAQ:SPRY) will manufacture and supply neffy to Pediatrix in China at the cost of goods. The company expects neffy to become available in China in the spring of 2026. Additionally, ARS Pharmaceuticals, Inc. (NASDAQ:SPRY) and Pediatrix plan to also file for approval of neffy 1 mg dose for children weighing more than 15 kilograms and less than 30 kilograms in the coming months.
ARS Pharmaceuticals, Inc. (NASDAQ:SPRY) is a biopharmaceutical company focused on developing treatments for allergies that could lead to anaphylaxis.
2. Strategy Inc (NASDAQ:MSTR)
6-Month Performance: -59.23%
Average Price Target Upside Potential According to Analysts: 193.21%
Number of Hedge Fund Holders: 43
Strategy Inc (NASDAQ:MSTR) ranks among the stocks that will bounce back according to Wall Street analysts. On January 6, Bernstein analyst Gautam Chhugani released his 2026 crypto outlook. Chhugani forecasts that Bitcoin could rise to $150,000, with a peak cycle target of $200,000 in 2027. This outlook comes despite a weak finish to 2025 for the cryptocurrency. Chhugani also pointed out that Strategy Inc’s (NASDAQ:MSTR) premium is expected to return as Bitcoin prices recover.
In other news, on January 5, Strategy Inc (NASDAQ:MSTR) reported that it purchased 1,286 Bitcoin between late December 2025 and early January 2026. These purchases increased the company’s total Bitcoin holdings to 673,783 Bitcoin, valued at $50.55 billion as of January 4, 2026.
The company acquired 3 Bitcoin for $0.3 million between December 29 and December 31, 2025. Strategy Inc (NASDAQ:MSTR) then acquired an additional 1,283 Bitcoin from January 1 to January 4 for $116 million. The company funded these Bitcoin purchases through its at-the-market stock offering program.
Strategy Inc (NASDAQ:MSTR) is an American company that has adopted Bitcoin as its primary treasury reserve asset. The company also provides advanced AI-powered enterprise analytics software.
1. Legend Biotech Corporation (NASDAQ:LEGN)
6-Month Performance: -39.40%
Average Price Target Upside Potential According to Analysts: 216.90%
Number of Hedge Fund Holders: 28
Legend Biotech Corporation (NASDAQ:LEGN) ranks among the stocks that will bounce back according to Wall Street analysts. On December 17, Cantor Fitzgerald maintained its Overweight rating on Legend Biotech Corporation (NASDAQ:LEGN) with a price target of $74. The firm said the stock has come under pressure because of concerns about competition, even though the company’s cancer therapy, Carvykti, is still on track to grow around 100% year-over-year to reach nearly $2 billion in sales in 2025.
Legend Biotech Corporation’s (NASDAQ:LEGN) partner, Johnson & Johnson (NYSE:JNJ), has maintained its outlook for Carvykti to achieve peak sales over $5 billion in the growing multiple myeloma market. This forecast was reaffirmed at a post-American Society of Hematology meeting with analysts.
According to estimates by Cantor Fitzgerald, Legend Biotech Corporation (NASDAQ:LEGN) is trading at an enterprise value to current sales multiple of roughly 3x and an enterprise value to peak sales multiple of approximately 1x. The research firm sees Legend Biotech Corporation (NASDAQ:LEGN) as “one of the best values in biotech” because of its prospects for strong revenue growth and expectations for the company to become profitable in 2026.
Earlier, on December 9, RBC Capital also reiterated its Outperform rating on Legend Biotech Corporation (NASDAQ:LEGN) with a price target of $74. The firm believes that Carvykti remains “potentially the highest efficacy option” with “one-and-done convenience.” RBC Capital recommends buying the stock during periods of weakness based on its expectations for near-term profitability and continued growth in 2026.
Legend Biotech Corporation (NASDAQ:LEGN) is a global biotechnology and cell therapy company focused on discovering, developing, and commercializing novel cell therapies for cancer and other serious diseases.
While we acknowledge the potential of LEGN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than LEGN and that has a 100x upside potential, check out our report about this cheapest AI stock.
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