The AI trade is currently experiencing a downturn as memory stocks, neocloud names, and semiconductors, which previously boosted market performance in early 2026, have seen significant sell-offs. In recent weeks, capital appears to be rotating into financials and biotechs, with sectors like cybersecurity also demonstrating strength. Stocks that have been neglected but possess solid fundamentals are likely to attract this rotational capital.
Key performers include Meta Platforms (NASDAQ: META), down nearly 12% year-to-date, and trading 27% below its 52-week high, despite reporting Q1 2026 revenue of $56.3 billion, a 33% increase year-over-year. Microsoft (NASDAQ: MSFT) has also lagged, down about 19% this year with earnings growth of 18.3% reported in Q3 2026. MercadoLibre (NASDAQ: MELI) is facing a 12% decline year-to-date, yet it recorded a 49% rise in Q1 2026 revenue. DLocal (NASDAQ: DLO) remains down 11% from its highs, projecting 32% earnings growth this year. Lastly, Robinhood Markets (NASDAQ: HOOD) is flat year-to-date but saw net income of $1.88 billion over the last 12 months, suggesting potential recovery opportunities.
As capital continues to shift away from the crowded AI sector, these five stocks present potential opportunities for investors, combining strong fundamentals with significant price drawdowns.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
