In this piece, we will look at the 10 Best Falling Stocks to Invest in Right Now.
The overall stock market has been in an uptrend, as depicted by major indices trading near all-time highs. The rally has come at the back of several key factors, including artificial intelligence frenzy and optimism about accommodative monetary policies, with the Federal Reserve cutting interest rates.
After two years of consecutive gains, valuations have gotten out of hand, with some stocks trading at levels and multiples not seen in years. The eye-watering valuations are raising concerns among value investors, constantly on the hunt for bargains. Morgan Stanley Wealth Management analysts have also fired warning shots about valuations that have gotten out of hand.
According to analysts’ expectations of earnings growth are too ambitious at a time when it is still unclear what President Donald Trump will do. “Policy uncertainty from the new administration appears underpriced. 2025 is not at all like 2017, and we view the risks as much higher,” said Lisa Shalett, chief investment officer and head of the wealth management unit’s global investment office. According to Shalett, investors are better off diversifying their portfolio by pairing investments in domestic stocks and bonds with equities outside the US.
READ ALSO: Billionaire Howard Marks’ Top 10 Stock Picks and 10 Cheap Value Stocks to Invest In, According To Seth Klarman.
While the rally in the equity markets has come on growing expectations that the US Fed will cut interest rates aggressively, it could stall as President Trump swings into action. According to UBS CEO Sergio Ermotti, the expected decline in interest rates could be stalled should Trump impose tariffs on allies.
“Something that I’ve been saying for a while, inflation is much stickier than we have been saying. The [truth] of the matter is that we need to see also how tariffs will play a role in inflation. Tariffs will probably not really help inflation to come down. And therefore I don’t see rates coming down as fast as people believe,” Ermotti said at the World Economic Forum in Davos, Switzerland.
Most stocks trading at all-time highs are enjoying premium valuations on investors betting on them amid expectations of lower interest rates. Amid the blockbuster gains, some stocks have gone the opposite way, tanking to levels not seen in years. The selloff that has come into play has given rise to undervalued stocks trading close to their 52-week lows. While the prospects of the selloff persist, stocks are also showing signs of bottoming out. Consequently, the best-falling stocks to invest in are companies backed by solid underlying fundamentals affirming their long-term prospects.
For good reason, economists are upbeat about the US economy and stock market. In the United States, GDP growth has been steady, interest rates are predicted to decline, and the incoming president is firmly pro-business. That presents a perfect environment for fallen stocks with solid fundamentals to bounce back. Since value stocks are already priced at or below their intrinsic value, they should theoretically have a lower downside risk.
A businessman in a boardroom, monitoring the stock performance of the company.
Our Methodology
To make our list of the best falling stocks to invest in right now, we scanned the US stock market for stocks that have fallen significantly and are trading close to their 52-week lows (0-10% above). We then settled on the top ten fallen stocks that have the potential to bounce back. We finally ranked these stocks based on their upside potential.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Falling Stocks to Invest in Right Now
10. Adobe Inc. (NASDAQ:ADBE)
52 Week Range: $403.75 – $638.25
Current Share Price: $437.32
Number of Hedge Fund Holders: 123
Stock Upside Potential: 33.20%
Adobe Inc. (NASDAQ:ADBE) is a diversified software company that offers products, services, and solutions that enable individuals, teams, and enterprises to create, publish, and promote content. While it might come as a surprise that the stock is trading close to its 52-week low, it boasts tremendous upside potential.
Nevertheless, Adobe Inc. (NASDAQ:ADBE) has shown it continues to fire from all angles amid the AI revolution. For starters, the company continues to innovate and expand its addressable market with the launch of a suite of AI-driven tools under its Firefly brand. The tools offer AI capabilities for images, text effects, and video.
Adobe Inc. (NASDAQ:ADBE) also boasts a solid 89% gross margin and 36.6% free cash flow margin. Its 13% year-over-year growth in digital media average recurring revenue underlines its ability to continue generating long-term value. Adobe has a big chance to increase the price of its AI apps to bolster its revenue base further. However, given that management is attempting to promote the use of the solutions, it needs to find a balance that draws in more revenues while not scaring customers.
9. Vale S.A. (NYSE:VALE)
52 Week Range: $8.38 – $14.27
Current Share Price: $8.87
Number of Hedge Fund Holders: 41
Stock Upside Potential: 33.52%
Vale S.A. (NYSE:VALE) is a basic materials company that produces and sells iron ore, iron ore pellets, nickel, and copper. It was one of the hardest hit companies as the Chinese economy slowed in 2024, resulting in a slump in iron prices. Consequently, the stock fell by about 34%, close to 52-week lows. Amid the slump, the company’s long-term outlook is looking increasingly positive.
According to analysts at Citi, the supply of iron ore from other countries in China has declined significantly, affirming reduced supplies. Given that supplies have fallen by about 130 million tonnes, prices are expected to spike significantly in 2025. A spike in iron ore prices would greatly benefit Vale S.A. (NYSE:VALE) as it would help strengthen its revenue base.
The Chinese real estate sector’s recovery after years of slowdown is another factor expected to cause some tailwinds to Vale stock. The recovery would trigger increased demand for Iron ore, of which Vale S.A. (NYSE:VALE) is one of the biggest suppliers. The electric vehicle revolution is another factor expected to benefit Vale as it continues to fuel demand for Nickel, therefore driving prices higher.
Here is what White Falcon Capital Management said about Vale S.A. (NYSE:VALE) in its Q4 2024 investor letter:
“While this uncertainty in Brazil has prompted many investors to offload Brazilian stocks, we’ve taken advantage of this environment to establish a position in Vale S.A. (NYSE:VALE). Vale is among the world’s largest and lowest-cost iron ore producers and boasts a growing portfolio of high-demand copper and nickel assets. It is currently trading at a P/E of 5.3x with a 8% dividend yield.”
8. Constellation Brands Inc. (NYSE:STZ)
52 Week Range: $176.51 – $274.87
Current Share Price: $178.96
Number of Hedge Fund Holders: 36
Stock Upside Potential: 34.09%
Constellation Brands Inc. (NYSE:STZ) is a beverage company that produces, imports, markets and sells beer, wine, and spirits. The company provides beer primarily under the Corona Extra, Corona Familiar, and Corona Hard Seltzer brands. The stock has taken a significant beating on management lowering fiscal 2025 earnings per share guidance to between $13.40 and $13.80 from an earlier guidance of $13.60 to $13.80.
The lower-than-expected EPS guidance comes with concerns that consumers will revert to normalized spending amid the prevailing economic conditions. Amid the concerns, Constellation Brands Inc. (NYSE:STZ) is expected to sustain double-digit percentage sales growth in its core beer business. The growth is expected to continue as brands like Modelo and Corona continue to gain market share in the highly competitive sector.
Constellation’s alcoholic beverage business generates an operating profit margin of over 30%. This diverse and extremely successful beer company has many positive aspects, especially considering its exceptional capacity to generate free cash flow. The company is also expected to benefit by aligning its portfolio with high-margin brands to meet changing consumer preferences.
Maintaining market leadership in the high-end beer segment in the United States and increasing production capacity in Mexico are critical success factors. Constellation Brands Inc. (NYSE:STZ) has embraced premiumization as a strategy by selling off less lucrative brands like SVEDKA and supporting high-growth premium labels. Its future profitability and market positioning depend on operational investments, particularly in Mexico’s production capacity.
7. PG&E Corporation (NYSE:PCG)
52 Week Range: $15.94 – $21.72
Current Share Price: $16.44
Number of Hedge Fund Holders: 49
Stock Upside Potential: 36.86%
PG&E Corporation (NYSE:PCG) sells and delivers electricity and natural gas to customers in northern and central California. It generates electricity using nuclear, hydroelectric, fossil fuel-fired, fuel cell, and photovoltaic sources. While the stock has taken a significant hit, the company continues to strengthen its infrastructure and services, aiming to provide sustainable and reliable energy solutions.
According to Pacific Gas and Electric Company’s (PG&E) R&D strategy report, artificial intelligence is essential to reaching clean energy targets and enhancing customer satisfaction. Opportunities for AI to enhance data analysis, increase capacity, lower emissions, stabilize bills, and improve customer service are described in the report.
Additionally, PG&E Corporation (NYSE:PCG) has secured a $15 billion loan guarantee from the US government that it plans to use to fund a portfolio of projects to meet growing power demand. Amid the artificial intelligence race, demand for power data centres is rising, presenting tremendous opportunities for the company. Tech giants are increasingly partnering with utility companies in a bid to secure clean energy supplies, a move that is prompting companies to kick-start nuclear energy generation. The initiatives can only support the company’s growth prospects, affirming why it is one of the best-falling stocks to invest in right now.
6. Rio Tinto Group (NYSE:RIO)
52 Week Range: $57.85 – $74.24
Current Share Price: $61.12
Number of Hedge Fund Holders: 30
Stock Upside Potential: 37.12%
Rio Tinto Group (NYSE:RIO) is a basic materials company that mines and processes mineral resources worldwide. It operates through Iron Ore, Aluminum, Copper, and Minerals Segments. While the stock has been in consolidation for months, several factors affirm why it is one of the best-falling stocks to invest in right now.
A proposed merger with Glencore is one catalyst that could provide some impetus to the stock. The merger would result in one of the largest mining companies in the world with massive mineral reserves. Additionally, there have been reports that Rio Tinto Group (NYSE:RIO) plans to acquire Teck Resources as it looks to strengthen its prospects in the industry.
Donald Trump administration’s ending regulatory red tape is another factor that strengthens Rio Tinto’s long-term prospects. For once, the company could secure approval for the Resolute Mine in Arizona, allowing it access to substantial copper deposits. The mine would put the company in a strategic position to benefit from growing copper demand amid the electric vehicle revolution. A recovering Chinese economy is also expected to fuel demand for various commodities, resulting in price spikes that will benefit Rio Tinto Group (NYSE:RIO).
5. Anheuser-Busch InBev SA/NV (NYSE:BUD)
52 Week Range: $45.94 – $67.49
Current Share Price: $47.60
Number of Hedge Fund Holders: 26
Stock Upside Potential: 39.18%
Anheuser-Busch InBev SA/NV (NYSE:BUD) produces and distributes beer and nonalcoholic beverages. It offers a portfolio of approximately 500 beer brands, which primarily include Budweiser, Corona, and Stella Artois. The world’s largest brewer has been under pressure over the past year, as depicted by the stock plunging close to its 52-week lows.
The drop to this year’s low underscores the market’s current sentiment towards the beverage giant as it navigates through complex industry dynamics. Last year, Anheuser-Busch InBev SA/NV (NYSE:BUD) grappled with controversy involving its bestselling brand, Bud Light, in the US. Despite the brand losing its crown as the top-selling beer in the US, Michelob Ultra did more than enough to offset the losses.
Likewise, Anheuser-Busch InBev SA/NV (NYSE:BUD) has moved to reinvigorate its growth metrics, focusing on nonalcoholic beers. Its Bud Zero and Corona Cero brands are becoming increasingly popular, helping diversify the company’s revenue base. Deep pockets and global influence leave the company in a solid position to market its product all over the world and forge partnerships that have the potential to drive sales. Its strategic partnership with FIFA is one such partnership that should continue strengthening the brand.
4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
52 Week Range: $114.41 – $227.30
Current Share Price: $123.75
Number of Hedge Fund Holders: 107
Stock Upside Potential: 39.74%
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a semiconductor company that offers x86 microprocessors and graphics processing units (GPUs). While the stock is trading near its 52-week low, it appears to be one of the best-falling stocks to invest in now, owing to the growing demand for GPUs for data centres amid the AI revolution. As demand for AI accelerators grows, the company has plenty of room to grow its business.
The company’s revenue of $6.8 billion only represented an increase of 18% year over year in the third quarter. However, it is expected to grow robustly in 2025 owing to AMD’s push for growth opportunities in the Graphic Processing unit market. Advanced Micro Devices, Inc. (NASDAQ:AMD) already boasts of Microsoft and Meta Platform as some of its biggest clients for its M1300 accelerators. As the companies ramp up the development of data centres for AI, AMD should be the biggest beneficiary.
The fact that Advanced Micro Devices, Inc.’s (NASDAQ:AMD) data center sales grew by 122% in the third quarter underlines how the company is taking the fight to Nvidia. Its AI Accelerators and EPYC line of server-grade processors are expected to continue driving growth in 2025 as they play an important role in the training and operation of large language models.
3. Novo Nordisk A/S (NYSE:NVO)
52 Week Range: $78.17 – $148.15
Current Share Price: $80.57
Number of Hedge Fund Holders: 61
Stock Upside Potential: 41.55%
Novo Nordisk A/S (NYSE:NVO) is a healthcare company that researches, develops, manufactures, and distributes pharmaceutical products. After dropping by about 23% in 2024, it is emerging as one of the best-falling stocks to invest in right now. That’s in part because the company boasts of a robust pipeline of weight loss and diabetes drugs that continue to elicit strong demand.
Novo Nordisk A/S (NYSE:NVO) has delivered consistent growth over the years owing to its expansive offerings that include groundbreaking innovations in diabetes and obesity. In the first nine months of last year, the company delivered a 23% increase in sales attributed to Ozempic and Wegovy sales. The two drugs have cemented the company’s position as a leader in diabetes, with a 34% market share.
While the launch of Wegovy affirms the company’s ability to address emerging challenges in obesity, it has also moved to strengthen its prospects with weight loss treatment CagriSema. While Novo Nordisk A/S (NYSE:NVO) took a hit on CagriSema, helping participants lose an average of 22.7% of weight versus 25% expected, the selloff appears to be an overreaction. With the stock trading near its 52-week low, it seems to be trading at a significant discount, going by the tremendous potential of its weight loss and diabetes treatment options.
2. ON Semiconductor Corporation (NASDAQ:ON)
52 Week Range: $53.10 – $85.16
Current Share Price: $56.03
Number of Hedge Fund Holders: 45
Stock Upside Potential: 45.41%
ON Semiconductor Corporation (NASDAQ:ON) provides intelligent sensing and power solutions. Its intelligent power technologies, such as power lights and longer-range electric vehicles, empower fast-charging systems and propel sustainable energy for solar string systems. Amid the tremendous opportunities for growth, the stock has underperformed after dropping by 25% in 2024.
Following the pullback, ON Semiconductor Corporation (NASDAQ:ON) may be one of the best-falling stocks to invest in as demand for artificial intelligence chips in the auto industry grows. After a few years of poor sales, automakers are seeing a significant spike in demand for vehicles. The spike is expected to fuel demand for chips that ON Semiconductor sells. Early indications of improvement are evident. While margins increased half a percentage point to 45.5%, ON Semi’s auto sales increased 4.9% to $951 million in the third quarter.
Additionally, management has over $1 billion in free cash flow, which it intends to use to repurchase shares. Analysts predict that earnings per share will increase by 21% yearly to $7.11 by 2027, in addition to anticipated sales growth and improving profitability.
1. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN)
52 Week Range: $666.25 – $1,211.20
Current Share Price: $680.03
Number of Hedge Fund Holders: 62
Stock Upside Potential: 48.14%
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) discovers, develops, manufactures, and commercializes medicines for treating various diseases. The company’s lead products include Eylea injection for treating wet age-related macular degeneration and diabetic macular edema. The company was under immense pressure, dropping by 27% in 2024.
The underperformance came as investors reacted to the company’s lead product, Eylea, facing stiff competition from Roche’s Vabysmo. The issue was further exacerbated by biosimilar competition, Amgen having won the right to launch its biosimilar version for Eylea. Amid the stiff competition, Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) delivered solid third-quarter results, with revenues increasing 11% year over year.
Additionally, the company moved to strengthen its competitive edge by developing a high-dose formulation for Eylea. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) succeeded in taking the fight to Roche by decreasing the number of annual injections. The company’s other growth driver, Dupixent, is also doing well, helping shrug off sales slowdown in different drugs. The fact that the US Food and Drug Administration has approved using Dupixent to treat COPD positions Regeneron to generate billions of dollars in annual sales. Dupixent has the potential to strengthen Regeneron’s revenue base, given that the COPD indication market is still fresh.
As we acknowledge the growth potential of Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than REGN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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