TOP STOCK PICKS FOR 2026

This is something completely new to me, and I’m sharing it mainly for my own reference. I’ve been investing for just over two years, so I’m still very much learning—nothing I say here should be taken as financial advice. The main reason I’ve started writing is to document my thoughts over time and use this platform as something I can look back on in the future. I originally planned to share this earlier in the month but work commitments and a recent holiday got in the way. Since it’s still January, I want to post my top stock market picks for 2026. I’ll also include two stocks that I believe could be especially influential over the next 3–5 years, based on where I think the world is heading before 2030.

Looking at the current market, the S&P 500 is still trading at all-time highs, despite several factors that could have pushed it lower. One of the biggest concerns recently was the situation involving Trump and Greenland on January 20th. There was significant worry that the market would dip sharply, especially with the possibility of Trump increasing tariffs on countries that do not align with him following the Greenland situation.

In my opinion, without getting too deep into the politics and focusing purely on the market, we’ve seen this kind of news before. If we look back to April 2025, when Trump first mentioned introducing tariffs, the market was spooked and the S&P 500 dropped by roughly 10%. However, this time around, I believe the market has largely priced in this type of headline risk, which is why I don’t expect a drop of the same magnitude.

Currently, the S&P 500 is down about 2.5% over the last five days, and the P/E ratio is sitting around 30. From a valuation perspective, this still suggests a bullish market. Unless we see a larger pullback over the next few months—bringing the P/E closer to the 25 range—it’s difficult to assess a more meaningful shift in market direction.

Historically, higher P/E ratios on the S&P 500 tend to increase the likelihood of a correction. For example, prior to the April pullback, the P/E ratio was around 28 in February before falling to roughly 24 in April. That decline was then followed by a strong rally over the subsequent months. A similar pattern can be seen in 2021, when the P/E ratio was in the 30s before gradually declining, leading into the 2022 market crash, where valuations fell into the low 20s.

While the P/E ratio of a single index isn’t a perfect indicator, it’s one metric I personally track closely to gauge where the broader market currently stands.

After this brief introduction on how I view the market, I’d like to discuss buying opportunities that I believe are currently undervalued. In a future post, I’ll go into detail about my current holdings, but for now I want to focus on my top picks for 2026. As we head into 2026, the S&P 500 has delivered three strong positive years, despite 2022 being one of the worst years in its history. Against this backdrop, I’m focusing on stocks in today’s market that appear significantly oversold and undervalued.

Pick Number One- Adobe

First stock I’d like to discuss is Adobe. After a horrible year in which the stock fell roughly 30%, the decline has continued into the new year, with shares down about 18% in January alone.

The primary reason for this sell-off appears to be fear around AI disrupting Adobe’s core business. Many investors are concerned that AI will replace what Adobe has historically done so well. In my humble opinion, this reaction is completely overblown.

Currently, Adobe is trading at around a 12 P/E ratio, compared to the S&P 500 at roughly 30 P/E. To me, this clearly signals that the stock is oversold. A valuation like this might make sense if the company were showing signs of deterioration—but that is far from the case. Over the last four quarters, Adobe has delivered double beats on both EPS and revenue.

This leads to the key question: Is Adobe going to sit back and allow AI disruption to drive further decline? I don’t think so. Adobe has its own AI platform, Firefly, which continues to improve each quarter. Management has consistently provided positive guidance on its development during earnings calls. While there has been criticism that Firefly hasn’t yet matched competitors in quality—raising concerns about monetisation—I believe this underestimates Adobe’s long-term potential.

With earnings just around the corner, I expect another double beat, along with further positive guidance on Firefly’s progress. As an investor—and to be transparent, I do own shares in Adobe—I will continue buying at these levels. The company is still growing quarter over quarter, and I believe many analysts are focused too heavily on the short term rather than the bigger picture.

In my view, Adobe will continue to grow and refine its AI offerings. This is my number one pick for 2026, and I believe the company will bounce back strongly from its recent poor performance.

NFA

Pick Number Two – PayPal

My second pick for 2026 is PayPal. It’s a company that had a difficult 2025, with the stock down roughly 38% over the past year. However, its most recent quarterly earnings report was solid, with the headline being its strategic partnership with OpenAI.

PayPal is currently trading at a P/E ratio of around 9, compared to approximately 30 for the S&P 500. This valuation suggests the stock has been heavily oversold, which I believe presents an attractive long-term buying opportunity.

PayPal is no longer the high-growth stock it once was and is now more accurately classified as a value stock. In the current market, most investors are focused on finding the next big growth stock or multibagger. While that strategy can be rewarding, it often causes established companies like PayPal to go under the radar until the market eventually recognises how undervalued they are.

That said, PayPal does face increased competition, particularly from companies such as Klarna and other “buy now, pay later” providers.

In September 2023, PayPal appointed a new CEO, Alex Chriss, whose vision aligns more closely with how the global payments industry is evolving. Following his appointment, the stock initially rallied from around $50 to nearly $90. I should note that I owned shares during that period and later sold them, but I have since re-entered at current price levels.

Alex Chriss CEO of PayPal is focused on modernising PayPal while maintaining profitability.

His key priorities include Keeping the core business profitable, expanding PayPal’s presence in AI-driven payments and services Product expansion to support long-term growth competing in the buy now, pay later space introducing and enhancing customer loyalty programs.

While PayPal once traded near $200 per share, I believe those valuations are unlikely to return. However, with the stock currently trading around $55, I see this as a strong long-term buying opportunity for a fundamentally solid company that is repositioning itself for the future. NFA

Just to conclude my first post a brief mention of a two stocks that I like and actively own. In my opinion, two companies that could be transformative over the next five years are Terrestrial Energy (IMSR), a nuclear energy company, and Churchill Capital (CCCX), which is expected to merge with Infleqtion, a quantum technology company. I believe these two sectors—nuclear energy and quantum computing—will follow from the AI boom. I’ll discuss them in more detail in future posts. Since this is my first post on Substack, I don’t want to go on at length or cover all the other stocks I like or own. In time, I’ll share more about them. For now, I’ll simply mention my two stock picks for 2026: PayPal and Adobe.