Entering a new year often urges investors to consider adjustments that might benefit their financial standing in the months to come. One sound approach is enhancing portfolio diversification to both capitalize on growth opportunities and shield against downturns. With this perspective, we explore five selected stocks worthwhile for consideration at the outset of 2026, spanning different industries and including one company primed for a notable recovery.
Amazon: Harnessing AI While Sustaining Core Strengths
Amazon (NASDAQ: AMZN), trading at approximately $240.93 with a market capitalization near $2.6 trillion, maintains its reputation as a robust investment partly due to its impressive earnings history unrelated directly to artificial intelligence. The company’s e-commerce segment and its Amazon Web Services (AWS) cloud platform have consistently generated billions in profits, underpinning optimistic prospects for continuing earnings stability.
Amazon further leverages AI to enhance the efficiency of its e-commerce logistics and operations. The AWS division also offers a broad portfolio of AI-related products and services, contributing to AWS achieving an annual revenue run rate exceeding $132 billion. This blend of seasoned earnings and emerging AI integration makes Amazon an attractive stock to consider for long-term holding.
Eli Lilly: Capitalizing on Growth in Weight Management Pharmaceuticals
Eli Lilly (NYSE: LLY) has witnessed notable stock appreciation, currently positioned at $1,064.04 per share with a $1 trillion market capitalization, thanks to its leadership in the expanding weight loss drug market. The company’s flagship products, tirzepatide-based medications such as Zepbound for weight loss and Mounjaro for type 2 diabetes, have gained blockbuster status, significantly driving revenue growth.
The firm has submitted a weight loss pill to regulatory bodies, with a decision expected soon. Approval of this candidate may provide a substantial boost to the company’s stock and possibly usher in additional revenue growth. With the weight loss drug market anticipated to approach $100 billion by the decade’s end, Eli Lilly appears to be on the cusp of an extended growth phase.
Chewy: Expanding in Pet Care with Recurring Revenue Streams
Chewy (NYSE: CHWY), trading around $32.16, operates as a comprehensive online retailer for pet supplies, including food, toys, and health services. In recent years, it has broadened its business model by inaugurating veterinary clinics, thus adding new revenue dimensions and introducing online retail offerings to additional customer segments. The company boasts a market cap of approximately $13 billion.
Noteworthy is Chewy’s Autoship service, accounting for 84% of total sales, which automatically dispatches pet products to customers on a regular basis. This recurring revenue model enhances predictability in income streams. Although trading at a forward price-to-earnings ratio of 26, down from over 36 last year, Chewy’s consistent growth and customer loyalty present a compelling investment opportunity.
Apple: Integrating AI and Growing Services Revenue
Apple Inc. (NASDAQ: AAPL), valued at an estimated $3.9 trillion, has slightly lagged the S&P 500 in stock performance over the past year, with shares around $262.43. Despite delayed adoption of AI features across its product lineup, Apple now operates the Apple Intelligence system, potentially reinforcing its strong consumer base and increasing spending on services.
Services constitute a significant growth pillar for Apple, with record-breaking revenues reported consecutively, driven by subscriptions for entertainment and cloud storage. This transition towards service-oriented revenue may mark a new phase in the company’s expansion and make Apple a stock worth acquiring as it embarks on this transformative journey.
Moderna: Navigating Recovery with a Robust Pipeline
Moderna (NASDAQ: MRNA), trading at $35.66 and holding a market cap near $14 billion, exemplifies a recovery story after the decline in sales of its primary coronavirus vaccine affected earnings and stock value. Its current portfolio includes vaccines for coronavirus and respiratory syncytial virus (RSV), though sales have fallen short of expectations.
Looking ahead, Moderna anticipates expanding its seasonal vaccine offerings from three products currently to six by 2028. The company is also implementing cost reductions and aims to achieve cash breakeven by that year. While some risks remain given the company’s dependence on vaccine sales and the transition phase it faces, Moderna’s advanced pipeline makes it a viable consideration for growth-oriented investors willing to accept elevated risk.
Key Points
- A diversified portfolio including companies like Amazon, Eli Lilly, Chewy, Apple, and Moderna can balance exposure to AI, pharmaceuticals, pet care, consumer electronics, and biotech sectors.
- Amazon and Apple are integrating AI technologies to enhance their established business models, potentially fueling future revenue streams.
- Eli Lilly and Moderna represent pharmaceutical sectors with notable growth potential and recovery prospects, respectively.
Risks and Uncertainties
- Moderna’s reliance on vaccine sales amid industry shifts introduces uncertainty regarding sustained earnings.
- The outcome of regulatory review for Eli Lilly’s weight loss pill could materially affect the company’s growth trajectory.
- Chewy’s valuation contraction from previous year levels indicates some market concerns despite positive growth and profitability signs.