The scoreboard could not look better. Yesterday the S&P 500 closed at a new record, its 23rd all-time high of 2026, and the Dow closed above 54,000 for the first time in history. The index is up more than 11% on the year. From a distance, everything is working.

Look under the hood, though, and the rally is narrow. A handful of megacaps are doing the heavy lifting while dozens of quality businesses have been left face-down in the dirt. Some of the market’s worst performers this year are not broken penny stocks – they are profitable, cash-generating companies that simply guided cautiously, stumbled through one bad quarter, or fell out of favor with a crowd chasing AI winners. That is exactly where contrarians go shopping.

Here are five under-the-radar names trading far below their recent highs, why the market abandoned them, and the catalysts that could bring buyers back.

The Trade Desk (TTD)

The pain: The dominant independent ad-tech platform has been cut roughly in half in 2026, sitting near $21 after a brutal run. Weak first-quarter guidance of only about 10% growth – down from an 18% pace in 2025 – spooked a market used to hypergrowth. A public spat with agency giant Publicis over fee practices and yet another CFO departure poured salt in the wound.

The gain: Most of that bad news has an expiration date. Publicis has already reinstated its endorsement of The Trade Desk to clients, defusing the biggest overhang. More importantly, Google’s move to end third-party cookies in Chrome plays directly into TTD’s hands – its UID2 identity framework is the leading open-internet replacement. If advertisers standardize on it, The Trade Desk becomes the toll booth for the post-cookie web. A market leader growing double digits and trading at a fraction of its former multiple is a rare setup.

Insulet (PODD)

The pain: The maker of the Omnipod tubeless insulin pump is down roughly 40% over the past year despite putting up genuinely strong numbers. In its most recent quarter it grew revenue 34% and beat both earnings and sales estimates – and the stock still fell nearly 10% on the report. This is a classic case of a great company whose valuation had simply run ahead of itself, leaving no room for error.

The gain: The business is not the problem; sentiment is. Management guides to 21-23% revenue growth this year on the back of Omnipod 5 adoption and international expansion, and the company just won FDA clearance for algorithm upgrades that keep it competitive in automated insulin delivery. The near-term catalyst is immediate: Insulet reports second-quarter earnings on August 5. Another beat-and-raise against beaten-down expectations could snap the negative narrative fast.

EPAM Systems (EPAM)

The pain: This digital-engineering and IT-services firm has been treated as an AI casualty, down close to 48% year-to-date to around $91. The fear is straightforward – if AI writes code, who needs an army of engineers? Management didn’t help by trimming full-year revenue growth guidance to 4-6.5% and flagging soft client decision-making, and a wave of analyst price-target cuts followed.

The gain: At roughly seven times forward earnings, EPAM is priced as if it is in secular decline, yet the fundamentals say otherwise. The company beat earnings last quarter, generated more than $125 million in AI-services revenue, and signed an applied-AI partnership with Anthropic. If AI turns out to be a tool EPAM sells rather than a threat that replaces it – the more likely outcome for a firm helping enterprises actually deploy the technology — the current multiple looks like a gift.

CoStar Group (CSGP)

The pain: The commercial-real-estate data powerhouse is the S&P 500’s single worst performer this year, down nearly 57% and recently kicked out of the Nasdaq-100. The culprit is Homes.com, its ambitious and still-unprofitable residential portal. Activist investor D.E. Shaw went public criticizing the board over “reckless” spending, and with residential bookings failing to accelerate, patience ran out.

The gain: The core CoStar franchise – the indispensable data subscription business commercial real estate runs on – remains a wide-moat cash machine, and it is being valued at a seven-year low. Management is now responding to the pressure, cutting Homes.com sales and marketing spend by about $50 million in the fourth quarter versus a year ago. If capital discipline returns and the residential losses narrow, the market’s fixation on Homes.com flips from an anchor into the very catalyst that re-rates the stock.

Tractor Supply (TSCO)

The pain: The rural-lifestyle retailer has slid about 47% over the past year to near $31, hitting fresh 52-week lows. Two straight soft quarters – flat same-store sales, an earnings miss, and a full-year guidance cut – plus a stumbling push into the companion-animal category left investors cold. Piper Sandler and others cut ratings as the growth story lost its shine.

The gain: Tractor Supply’s problems look cyclical, not structural. Its customer base of rural and suburban homeowners is durable, its store footprint keeps expanding, and softer consumer spending tends to reverse. The company still grows revenue and generates steady cash. A stabilization in same-store sales – or simply an end to the guidance cuts – could be enough to draw value buyers back to a proven retailer trading at its cheapest level in years.

The bigger picture

None of these are risk-free. Falling stocks fall for reasons, and each of these names carries a real one – decelerating growth, competitive threats, a capital-allocation misstep, or a soft consumer. Zoetis, another 2026 laggard, is a reminder of how quickly a safety or litigation issue can turn a cheap stock into a value trap.

But that is precisely the point. When the index is setting records, bargains are scarce, and the few that exist tend to hide among last quarter’s disappointments. The market has already priced in a lot of bad news for these five. It may be underpricing the catalysts sitting just around the corner.

These stocks are part of a broader market rotation. For two years, a handful of mega-cap names carried the indexes. That era is quietly ending. Capital is rotating into sectors whose earnings are visibly improving – most of them nowhere near the AI headlines. Jim Pearce’s proprietary research reveals a wide expectation gap between what the market still assumes will be the winners and where the returns will actually come from. He lays out the counter-thesis – and the portfolio built around it – in his new margin rotation briefing.

Read his briefing and get access to his other Comeback Stocks for 2026 – just $49 for the first year.