These three fundamentally solid growth stocks are worth considering, even with the stock market currently close to its peak.
The hot hand fallacy—often linked to basketball—relies on the assumption that a player on a scoring streak will keep making baskets. It’s like flipping a coin and getting tails five times in a row. You might think it’s bound to turn up heads, right?
Investors can fall into a similar trap, focusing too much on recent stock price movements instead of the underlying fundamentals. Think about it: much like a basketball player’s shooting percentage, a company’s profit growth tends to balance out the highs and lows over time.
Looking back, 2025 was a stellar year for the U.S. stock market. But that’s behind us now. Instead of just looking at last year’s winners, investors should explore stocks that might take off in 2026 and the years to come.
This brings us to Amazon, Netflix, and Visa—these are the top picks for 2026.
Amazon’s Pricing Looks Good
Amazon has lagged in 2025, with only a 5.5% increase year-to-date, especially when you compare this to the S&P 500, which saw a 17.3% gain. A drop in consumer spending is expected to affect Amazon’s e-commerce and services like Prime, Audible, and Music. On top of that, Amazon Web Services (AWS) faces stiff competition from major players like Microsoft and Google Cloud.
In the past, Amazon’s valuation relied heavily on its revenue. However, things have shifted; AWS now contributes more operating income than the rest of Amazon’s business combined. Unlike many tech giants that return money to shareholders via buybacks or dividends, Amazon continues to invest significantly in growth. Still, it’s also more consistently profitable and generates positive cash flow than ever before.
Even with low consumer spending and a complicated cloud landscape, Amazon is still seeing healthy revenue growth—outpacing its lagging stock price. This means investors can acquire Amazon shares at around 32.8 times projected earnings. Interestingly, that’s almost equivalent to Apple, which is doing well yet trades at a slightly higher multiple of 33.2 times.
Concerns Surrounding Netflix’s Future
Netflix has seen a 29% drop over the last six months, though its stock is still gaining significantly in 2023. Yet, it’s not exactly a bargain, priced at 37 times forward earnings.
The market doesn’t take kindly to uncertainty, and Netflix’s future looks a bit iffy—everybody’s anticipating its next moves, especially after companies like Warner Bros. Discovery and Paramount are shaking things up. Historically, Netflix has excelled at licensing and developing content rather than outright acquisition.
Increasing operating costs, coupled with predictions that the 5th season of *Stranger Things* might cost somewhere between $400 million and $480 million, are starting to worry investors. I mean, that’s more than what some blockbuster films have spent!
Sure, Netflix is a cash-generating machine, but if spending keeps climbing and acquisitions remain high, future profit growth seems questionable. This could explain the sell-offs happening. Yet, I’d argue those fears are somewhat exaggerated. Netflix has a strong balance sheet, funded by its own operational revenues without relying too much on debt. It’s also exploring opportunities for rich partnerships with companies like Warner Bros. Discovery that could expand its production capabilities.
Visa’s Lasting Power in Finance
The financial sector has significantly influenced market growth in recent years. Many major banks are trading near their historical highs, with companies like JP Morgan Chase nearing the trillion-dollar mark.
In this environment, Visa stands out as an appealing option, even with stocks nearing their peak. As the top payment processor in the U.S., Visa has a formidable global reach.
Every time someone uses a debit or credit card, Visa benefits—whether it’s swiped, inserted, or tapped. Charging fees based on transaction volume ensures its revenue stream remains robust, and even in economic downturns, Visa continues to generate impressive profits, allowing for shareholder returns through dividends or buybacks.
Also, Visa’s solid infrastructure offers safety and scale, making it an attractive partner for financial institutions. With the growing trend toward digital transactions and a decline in cash use, Visa is poised to thrive. It currently trades at 27.7 times forward earnings; while not the cheapest, it’s still a fair price for a high-quality industry leader.
