The S&P 500 is up nearly 16% this year, driven mostly by AI and tech stocks. But if you look beyond the obvious winners, there’s a group of companies that have outperformed the index while maintaining valuations well below the market average.
We screened for stocks that beat the S&P 500’s performance this year, have forward P/E ratios below 20 (cheaper than the S&P average), and carry buy ratings from analysts. What we found: 24 stocks that rallied between 20% and 208% this year but are still trading cheap heading into 2026.
Here are three that stand out.
Micron Technology (MU) – Up 146%, Trading at 12x Forward Earnings
YTD gain: 146% | Forward P/E: 12
Micron is up 146% this year, which sounds expensive until you look at the valuation. The stock trades at just 12 times forward earnings, well below the S&P 500 average of 20.
The memory chip maker has been riding the AI wave as data centers need massive amounts of high-bandwidth memory. Morgan Stanley analyst Joseph Moore recently reiterated his overweight rating and named Micron a top pick, citing a shortage in DRAM (dynamic random-access memory) that should boost earnings power.
Moore’s note from mid-November was clear: “We believe that’s going to move us firmly into uncharted territory from an earnings standpoint, and we think the stock has yet to fully price in the upside that’s coming.”
The AI infrastructure buildout requires HBM (high-bandwidth memory), which is Micron’s specialty. Supply constraints in DRAM mean pricing power should remain strong through 2026. Despite the massive rally this year, the stock is still cheap relative to its earnings potential if the memory shortage continues.
Analysts have an average price target that implies the stock could move higher from current levels, with some targets as high as $338. The valuation disconnect between the stock’s performance and its P/E ratio suggests the market hasn’t fully priced in the earnings growth ahead.
CVS Health (CVS) – Up 74%, Trading at 11x Forward Earnings
YTD gain: 74% | Forward P/E: 11 | Analyst target: $90.66
CVS has rallied 74% this year but still trades at just 11 times forward earnings. That’s one of the cheapest valuations on this entire list, and analysts see another 16% upside to their average price target of $90.66.
The company reported strong Q3 earnings in late October that beat expectations, and management raised its adjusted profit outlook after seeing improvement at its insurance unit. That’s the turnaround story investors have been waiting for.
The pharmacy benefit manager business (Caremark) faces some headwinds as contracts transition to new drug pricing levels, which management flagged. But the insurance unit’s improvement is offsetting that pressure and driving the better-than-expected results.
Of the 19 analysts covering CVS, six rate it a strong buy and 18 give it a buy rating. That’s overwhelming bullish sentiment from the Street, and with the stock trading at 11x earnings after a 74% rally, there’s a case that it’s still undervalued relative to the turnaround progress.
The healthcare sector has been rotating higher, and CVS is positioned to benefit if that momentum continues into 2026. At this valuation, the risk-reward looks attractive.
Newmont (NEM) – Up 124%, Trading at 11x Forward Earnings
YTD gain: 124% | Forward P/E: 11
Newmont is up 124% this year as gold prices hit record highs above $4,000 per ounce. Despite more than doubling, the stock trades at just 11 times forward earnings.
Gold miners offer leverage to the gold price, and Newmont is the largest gold miner in the world. When gold rallies, the miners’ profits expand significantly because their costs are relatively fixed while revenue rises with gold prices.
Gold pulled back from its October highs but is still trading well above $3,900 per ounce. The fundamental drivers that pushed gold higher—central bank buying, currency concerns, geopolitical instability—haven’t gone away.
Newmont reported record free cash flow recently with all-in sustaining costs around $1,566 per ounce. With gold above $3,900, margins are exceptional. If gold maintains these levels or pushes higher in 2026, Newmont’s earnings could surprise to the upside.
The 11x forward P/E seems cheap for a company operating with these kinds of margins in a commodity environment that remains supportive. The stock has had a massive run, but the valuation suggests there could be more upside if gold stays elevated.
The Bigger Picture
These three stocks represent different sectors—semiconductors, healthcare, and materials—but they share a common theme: strong performance this year that hasn’t been fully reflected in their valuations.
The market has been laser-focused on AI and mega-cap tech, which has allowed other winners to fly under the radar. When stocks can rally 74%, 124%, even 146% and still trade at P/E ratios of 11-12x, it suggests the market is pricing in risk or missing the earnings growth story.
Micron has the DRAM shortage and AI memory demand. CVS has the turnaround in its insurance business. Newmont has record margins and elevated gold prices. Each has a specific catalyst that could drive further gains in 2026.
As we head into the new year, these overlooked outperformers might be worth a closer look. Sometimes the best opportunities aren’t in the stocks everyone’s talking about—they’re in the ones that already rallied but are still trading cheap.
