2 Unloved Stocks of 2026 to Consider Buying Now
One stock has trailed a 52% chip rally, and the other is still 63% under its record.
2026 has been a pronounced year for tech investors. Semiconductor ETF VanEck has risen approximately 52%, but chip maker Broadcom has decreased by around 3%. Its stock trades around 31% below its June 2 high of $481.57. Adobe, a creative software company, has fallen even more, with its shares up 33% from their June 25 low of $193.41. However, at about $257, the stock remains 63% below its November 2021 record close of $688.37.
Both companies reported strong growth in their latest quarterly reports. Broadcom's revenue surged 86% year over year to $29.6 billion in its fiscal third quarter of 2026, while Adobe's revenue grew 13% year over year to $6.76 billion. Both stocks are now trading at a discount to the overall market relative to the earnings they're expected to generate.
Broadcom's drop in stock price was largely due to a significant decline following its June 3 earnings report, with the stock falling almost 20% over two trading days. However, the company's revenue and profits continued to rise, with non-GAAP earnings per share nearly doubling year over year and free cash flow increasing by 95% to $13.7 billion.
Adobe's stock price decline began years before 2026. Despite its recent bounce from its June low, the stock is down around 27% for the year. The pessimism appears to stem from concerns that artificial intelligence might undermine software companies like Adobe. However, the company's recent results indicate steady growth. In the fiscal third quarter of 2026, Adobe's revenue grew 13% year over year, and adjusted earnings per share increased by 15%.
Both Broadcom and Adobe are priced below the overall market relative to their expected earnings. At around $257, Broadcom's stock trades at about 10.5 times its expected earnings for the fiscal year, while Adobe's stock trades at around 10.5 times its expected earnings for the current fiscal year. This makes both stocks more attractive than the S&P 500, which trades at around 19 times earnings.
While Broadcom relies on a few key customers, and Adobe's growth might be slowing, both companies' recent performance and valuations suggest that their sell-offs have gone beyond what the businesses justify. Therefore, these authors suggest considering buying both stocks today, building each position gradually.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
