2 Beaten-Down Stocks That Could Make a Comeback in 2026

Group 1: The Trade Desk - The Trade Desk has experienced a significant decline, down approximately 70% in 2025, making it the worst-performing stock in the S&P 500 [4] - Despite its poor performance, The Trade Desk operates in a growing sector, matching advertisers with optimal online placements, and has a gross margin of 78.81% [7] - The company's revenue increased by 18% year-over-year in Q3, although this was viewed negatively due to a trend of declining revenue growth [8] - Political ad spending, which was absent in 2025, is expected to rebound, potentially leading to improved revenue growth in the upcoming year [10] - The Trade Desk is currently valued at less than 18 times next year's earnings, presenting a compelling investment opportunity [12] Group 2: PayPal - PayPal's stock has dropped about 30% in 2025, continuing a trend of slow growth and lack of investor traction [13] - The stock is currently trading at 10 times next year's earnings, making it appear undervalued compared to other high-growth stocks [15] - The management is focusing on share repurchases to enhance diluted earnings per share (EPS) growth, which has shown positive results in the latter half of the year [17] - If PayPal maintains its share buyback strategy and achieves significant EPS growth, it is positioned for a substantial recovery in 2026 [19]