You can call it a comeback. After a rocky start to 2025, culminating in a major selloff in early April following President Donald Trump ‘s announcement of sweeping tariffs on imports, the stock market rebounded strongly to new all-time highs in late October. Year-to-date, the broad-based S & P 500 has gained more than 16%. Investors can thank a resilient consumer, strong corporate earnings, a couple of Fed interest rate cuts, and, of course, the insatiable artificial intelligence trade. However, not all high-quality names joined the ride higher. Some management teams pursued strategies the Street wasn’t crazy about. Others were in the early stages of a turnaround, or the stock price hasn’t caught up to the company’s strong results, fundamentals, and outlook. And, while 2026 presents plenty of headwinds (most years do), some underperforming stocks are set up better than most to go higher, regardless of any short-term hiccups. Here are five of our favorites in the portfolio set to bounce back in 2026. AMZN YTD mountain Amazon YTD return Amazon struggled through 2025. The stock never found its footing amid concerns it was losing ground in the AI computing race and that higher tariffs would eat into its retail margins. But the tech giant may have turned a corner in the third quarter. Revenue growth from Amazon Web Services, its cloud computing business, finally reaccelerated to 20%, its fastest pace since 2022, and management pledged to continue aggressively investing in capacity to meet demand. Meanwhile, the company continued to gradually reduce the cost of serving its online shoppers by unlocking efficiencies in its fulfillment and transportation networks. A better year is ahead as management continues to prove out its AI strategy and expand operating margins. ETN YTD mountain Eaton YTD return Artificial Intelligence data centers are being built around the globe, and powering them efficiently poses significant challenges. That’s where Eaton steps in. This industrial company provides electrical equipment and power management solutions found throughout the data center. This part of Eaton’s business is on fire, with orders up 70% year over year in the third quarter. And yet, the stock is roughly flat on the year. As AI chips become more powerful, additional Eaton products and services will be needed to keep those data centers running. The company’s exposure to these powerful secular growth trends is a major reason it is expected to deliver double-digit earnings-per-share growth over the next several years. NKE YTD mountain Nike YTD return We love a good turnaround story at the Investing Club. After years of alienating its key retail partners and losing its athlete-first focus, retired longtime company executive Elliott Hill returned to Nike as CEO to fix this iconic sportswear brand. Hill is in the early innings of his “Win Now” strategic initiative, which centers on prioritizing its best-performing categories — running, basketball, football, training, and sportswear — across its main geographies. Also, Nike has shifted back toward wholesale, re-engaging partners like Dick’s Sporting Goods , which completed its acquisition of Foot Locker in September, instead of leaning too heavily on its direct-to-consumer channel. Turnarounds take time, explaining why Nike shares have had a down year. But the early signs are promising, with Nike finally clearing excess inventory and delivering meaningful product innovation. PANW YTD mountain Palo Alto YTD return Shares of Palo Alto Networks , a global leader in cybersecurity, were held back in 2025, mostly because CEO Nikesh Arora became overly deal-happy. There were concerns that he was paying too much to acquire CyberArk and, later, privately held Chronosphere. These two multibillion-dollar deals also carry some execution risk. However, we have great confidence in Arora’s ability to identify leading assets and acquire them at the precise moment before inflection points in their respective industries. Adding these two complementary businesses to Palo Alto’s cybersecurity solutions suite next year should enhance its “platformization strategy” of bundling its products and accelerate market share gains. SBUX YTD mountain Starbucks YTD return Starbucks is another turnaround story that should pick up momentum in 2026. In the coffeehouse chain’s latest quarter, CEO Brian Niccol said the turn had finally arrived for its U.S. operations. Same-store sales turned positive in September, and that momentum carried into October as customer traffic improved. Continued work to reduce service times and new menu innovations should support comps growth in the year ahead. Turning to China, Starbucks has de-risked its exposure to this ultra-competitive market through its agreement to form a joint venture with investment firm Boyu Capital. The cash proceeds from this deal also gave management more flexibility to shore up its balance sheet and keep pressing ahead with the U.S. store turnaround. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has discussed a stock on CNBC, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
