8 Cheap Stocks to BUY for 2026

Now that we have turned the page into 2026, you probably find yourself asking the question, "What are some highquality stocks I could buy right now at reasonable valuations?" And if that's you, you're going to love today's video because we're going to be covering eight stocks that I believe are trading at great valuations, have great growth prospects, and I believe are going to have a fantastic year in the year 2026. As always, this video is for educational purposes only. I'm not trying to predict short-term movements. I'm showing you how I look at fundamentals to try to find highquality assets at great valuations. Now, when I use the term cheap, that's not in reference to the price per share because there's a number of stocks out there. Could be a $30 per share stock. That could be way more expensive than a $300 per share stock. The stock price doesn't equate to valuation. So, with those eight stocks we're going to be looking at today, we're going to be focusing on fundamentals and valuation. And they come from a number of different sectors. technology healthcare consumer discretionary, communication services, and more. So, make sure you stay tuned throughout the entirety of today's video. All right, let's jump straight into the video, beginning with stock number one, which is going to be one of my favorites, Amazon. Stock ticker AM ZN. Amazon obviously has a global presence, but the thing that I continue to love about the company, and I mention it in a number of videos, is the fact that they are a diversified business. They have AWS, so that covers their cloud. Obviously, they have e-commerce, they have advertising, they have AI, and so much more. But when we talk about Amazon and we look at fundamentals from a historical perspective, if you were just looking at a PE ratio, then sure, this isn't a cheap stock. But with this company and the potential they have from a free cash flow perspective and an EV to IBIDA, that's the approach I like to look at when looking at Amazon. When it comes to the company, they currently have a market cap of $2.4 $4 trillion, making it one of the largest companies in the S&P 500. But over the past 12 months, it's been the biggest lagard of all mag 7 stocks, up roughly just 6%. In the past, historically, when you look at Amazon, anytime that they have big investment years, the stock tends to lag, and last year was a big investment year, and I continue to believe that investments are going to be key for this company moving forward. But I believe 2026 is the year when we're going to start seeing those investments begin to pay off as we see margins continue to increase, free cash flow continue to grow yet again. This could be the year in which we see Amazon start to play catch-up. When you look here at this fiscal AI chart, we already know revenues continue to grow, but are they becoming more efficient? And the answer to that question is yes. Operating margins are at a high of 11% and IBIDA margins are at an all-time high of 20%. As margins normalize, earnings power becomes much more viable. In terms of valuation, here's where things get intriguing. The company trades at a forward EV to Ebida at 13.1 times, which is near the lowest levels we have seen in the history of the company. What does that tell us? This is a company that's growing their IBIDA at a fast pace, but investors aren't yet giving them the credit. So, that allows us, long-term investors, to accumulate more shares. Analysts continue to be upbeat on the stock, rating it a strong buy, giving it an average 12-month price target of $297 per share, implying nearly 25% upside from current levels. And that's going to lead us to stock number two, which is going to be Merc, stock ticker MRK. And the unique thing about Merc is the fact that it gives you something that not a lot of positions can, defensive growth. Most of the time, stocks are either defensive or growth. Merc can sometimes be both. But when you think about having a successful long-term portfolio, it's important to have balance, have that diversification, and it doesn't mean we need to be well diversified and have equal waiting across all 11 sectors in the S&P 500, but you want some diversification. And healthcare tends to be more defensive. When it comes to Merc, the company currently has a market cap of $264 billion. And over the past 12 months, shares are up 9%. With a majority of that coming in the past few months alone as the stock starting to get some momentum. What has been the drag, you might ask, on Merc over the past 12 months? Well, it's a lot of talk around their number one selling drug in Kitruda, which is expected to lose its patent protection here in the next few years. But this is very similar to the story of AVY, which once had the number one selling drug in the world in humra. This is the same approach that I'm taking here and I've continued to add to my position. And as you can see here from this trade alert, I was buying the stock in the $80 range and most recently in the low $90 range. And if you're interested in seeing my entire portfolio, getting trade alerts, our weekly edge report, then consider subscribing to my newsletter and becoming an Edge Plus subscriber. You can join the Discord and get all of this instantly. Check out the link down in the description below. Looking here at this fiscal AI chart, we can see revenues for Merc continue to grow, but so do free cash flow, which is what I love to see. Looking at this chart, you can see the margins for Merc operating IBIDA free cash flow margins. Currently, Ibida margins sit at a healthy 38% operating margins 31% and free cash flow margins above 25% nearly 30%. And I love to see all of these above 20%. all very healthy and showing the profitability of the company. Why is this important for Merc? Well, it's going to be important for any company, but specifically dividend paying companies because where are dividends paid from? Free cash flow. And as you can see here, Merc currently has a dividend that yields 3.2% with a 5-year dividend growth rate of 7% and the company's been growing its dividend for 15 consecutive years. Currently, in terms of valuation, shares trade at roughly 13 times as earnings will decline this year as a few of their diabetes drugs lost patent protection. But then look at the uptick in the following years, which put shares at just 10 times, making it look very intriguing at current levels if you have the time and the patience. And that's going to lead us to stock number three, which is going to be Nvidia stock ticker NVDA. Now, some of you may be asking, "Mark, how can you put a stock on a cheap list when it's up 1,400% over the past 5 years?" This is exactly what I'm talking about, because take this in. Their earnings have been growing at an even faster clip, which makes this stock even cheaper than it was 5 years ago. Something I always tell students inside my sixe investing accelerator program is to not solely focus on just share price movement. You don't know the number of students that have sold out of a position just because it was up 50%. They had no idea what was going on in the fundamentals. And the number of students that spoke to me saying that they sold out of their Nvidia shares a few years back because they were up 100%. They missed out on huge, and I mean huge gains. When it comes to Nvidia, they are currently the largest company in the S&P 500 with a market cap of $4.6 trillion. And over the past 12 months, shares are up 25%. However, since the start of August, shares are pretty much flat. So again, there's nothing broken with this company right here. But it comes back to the thing I continue to say. This is that period of accumulation for us long-term shareholders. Look how impressive these results are. Look here at the growth this company has seen over the years. We are talking about total revenues of 11.7 billion just back in 2019 to more than 187 billion over the trailing 12 months. Operating profits have gone from 3.8 8 billion in fiscal 2019 to 110 billion today. That is a 1,500% gain in revenue and a 2800% gain in operating profits. But again, traditionally folks look at huge share price gains and they say, "Well, how long can this last?" You have to also look at the fundamentals, look at the future growth, and the future growth is still there for Nvidia. In fact, I've been adding to my position slowly. And as you can see here, another trade alert for those that are Edge Plus subscribers within my Discord community of one of my recent purchases for Nvidia. In terms of valuation, analysts are looking for the company to generate EPS of $757 this fiscal year, which equates to a forward PE multiple of just 24.7 times for a company with a 2-year average growth rate of 44 1.5% per year. That equates to a PEG ratio well below one. The price you're paying compared to the growth that's expected, this stock appears very cheap. Analysts tend to agree as they rate the stock a strong buy with an average 12-month price target of $263 per share, which implies 40% upside from current levels. This is about earnings durability, not the quartertoquarter noise. And before we move on to the next stock, let me take a moment to thank today's video sponsor, which is the Mly Fool. The Mly Fool has a ton of great resources and products available for investors of all different levels. And right now, if you go to fool.com/mark, you could check out their 10 best stocks to buy right now. Now, let's move on to stock number four, which is going to be S&P Global, stock ticker SPGI, another position already in my portfolio. And I often like to refer to SPGI as a quiet compounder. They are a staple within the financial sector. And heading into 2026, I believe financials with earnings growth expected to increase. We're going to see a lot more mergers and acquisitions. We're going to see IPOs coming back. That is all going to benefit the financial sector. And if you think about it, SPGI kind of operates in a duopoly with the likes of Moody being the other side of it. The company currently has a market cap of $161 billion and over the past 12 months, shares are up 9% with all of that coming in the past month alone. Looking here at this fiscal AI chart, you can get what I'm saying when I open with SPGI being a quiet compounder. Its growth is not going to knock your socks off, but it's consistent. Over the trailing 12 months, revenues have reached $15 billion with operating profits at a record 6.1 billion. And looking here, you can see the company's free cash flow, which is at 5.5 billion. And their free cash flow margin is at a very healthy 36.4%. When it comes to S&P Global, this is a company that actually pays a dividend. Not a big dividend, but they pay a consistent growing dividend. And in fact, they're on the dividend kings list as they have increased their dividend for more than 50 consecutive years. Looking here, you can see the dividend stats. The yield is currently less than 1%, but you get decent growth at 7.5% on average over the past 5 years. So looking at all of that, the results are great and there's plenty of companies where results look great. But how do valuations look is the question. And speaking [snorts] of valuation, over the past 5 years, shares have traded at an average PE multiple of 29.4 times, but today you can pick them up cheaper at 27.9 times. Looking at a different angle at free cash flow, that multiple is at 25 times. Again, below the 5-year average of 26.7 times. So, both metrics pointing towards a slight discount over the past 5 years. Analysts tend to agree, rating the stock a strong buy with an average 12-month price target of $618 per share, which implies nearly 15% upside from current levels. This is a fantastic company with pricing power and reoccurring revenue. Businesses like this aren't cheap all that often. And that's going to lead us to stock number five, which is going to be Taiwan Semi, stock ticker TSM. And when it comes to Taiwan Semi, they're in a unique position because the fact of the matter is is you don't have to pick who's going to come out with the next greatest, fastest, most powerful chip. Is it Nvidia? Is it AMD? Is it Broadcom, Qualcomm? And the list goes on. No, you can just own Taiwan Semi, which is the key manufacturer for all of those companies. They are a key AI infrastructure play across the globe. However, I know all of that sounds great, but there is risk when it comes to Taiwan Semi, and it has to do with China. China's been keeping a close eye, wanting to presumably take over Taiwan. Now, I don't think the US is going to let that happen just overnight. But at the same time, this is the risk that's attached with Taiwan Semi. Hence why I believe the share price valuation is where it's at today. When it comes to Taiwan Semi, they currently have a market cap of $1.4 trillion. And over the past 12 months, shares are up an impressive 49%. Making it actually the second best performing stock on our list today over the past 12 months. And if you look at the gains from April, actually they've exceeded 125%. This is almost a must-own stock when you think about it from a technology sector perspective or specifically semiconductors. They have a high barrier of entry. They have an advanced chip manufacturing technology and the fact of the matter is huge demand and a massive backlog. All of this is evidenced by record revenues of 115.6 billion over the trailing 12 months and they had record operating profits of 57.2 billion. And in fact, free cash flow is also sitting at a record high of 28.4 billion. The company does use some of that free cash flow to pay a small dividend which yields currently around 1% but growing at a solid clip of 12% per year over the past 5 years. In terms of valuation, analysts are looking for the company to generate $13.3 per share in EPS this year, which equates to a forward PE multiple of 25.1 times. This with growth around 25% gives the stock an intriguing PEG ratio right at one. The geopolitical risk can't be denied, but neither can the business and this valuation. And that leads us to stock number six, which is going to be Netflix, stock ticker NFlx. And a few minutes ago, we talked about SPGI, how it's a highquality business, but businesses like that don't go on sale all that often. Well, that's what we're seeing here with Netflix, a highquality business trading at a great valuation. This is a company that's gone from a growth story to a cash flow story. The company currently has a market cap of $418 billion, but over the past 12 months, there's not much to show as shares are up just 3%, badly underperforming the greater S&P 500. Why the underperformance, you ask? Well, I believe a lot of it has to do with their pending acquisition of Warner Brothers, which is going to have a value of around $82 billion. Now, Paramount is still giving its bids, higher bids, to try and steal Warner back. But I believe Netflix is sitting in a win-win position because in fact, if Paramount steals away Warner and Warner decides to go a separate direction and break their deal with Netflix, they're going to have to pay a breakup fee of nearly $3 billion. And this isn't something that I believe Netflix needs. I think it's definitely going to enhance their offerings, but it's not necessarily something it's going to need. At the same time, it's going to lock up a lot of capital. So, there are pluses and minuses, and I think it could be positive either direction. As you can see here on this fiscal AI chart, free cash flow for the company is approaching $10 billion. And in fact, analysts are expecting that to reach 12 billion this fiscal year. In terms of valuation, analysts are looking for the company to generate EPS of $324 this year, which equates to a forward PE multiple of 27.9 times. And with earnings expected to grow 28%, that gives the company a PEG ratio of one. I love to find companies with a PEG ratio below 1.5. Analysts again are very upbeat, giving the stock a buy with an average 12-month price target of $134 per share, implying nearly 50% upside from current levels. And that leads us to stock number seven, which is going to be AVY, stock ticker ABBV. AVY combines growth with long-term income. You get the best of both worlds. Combining share price appreciation with the reliable and growing high yield dividend. There's not a lot of companies that can say that. And Avy, in fact, is one of my longest held positions within my personal portfolio. When it comes to the size of the company, they currently have a market cap just shy of $390 billion. And over the past 12 months, shares are up 25%, outpacing the S&P 500. Who says dividend stocks don't grow? You saw it right here with AVY and that doesn't even include the dividend that you got. This is the same thing I was talking about a few stocks earlier when we were talking about Merc. Avy has already taken that approach where they lost patent protection on their number one selling drug in Humera. But now to the credit of the management team, they have done a fantastic job diversifying their business, not relying so heavily. In the past, Humumera accounted for more than 60% of total revenues. Now you have Skyrisy, Renvoke, and a loaded pipeline coming through the stages. Looking here at this fiscal AI chart, you can probably tell when Humera lost its patent protection right here at the start of 2023. And it took until this past year to break through to new highs in terms of revenues, with those currently sitting at $60 billion nearly. And for comparison purposes, analysts are looking for nearly 67 billion in 2026. Free cash flow is also once again growing up to 19.7 billion on strong free cash flow margins of 33%. And again, for comparison purposes, analysts are calling for free cash flow to reach $26 billion this year. So again, you're beginning to see the trend. I don't focus just on companies growing topline revenue. I focus on the revenue growth, but more importantly, the internals, which companies are growing revenues, but also becoming more efficient at the same time. And AVY is a great example of a company that generates a lot of free cash flow. They use it for continued research for further drugs to come up the pipeline, but they also use it to return money to shareholders. One way they do that is via their dividend. In addition to that 25% share price growth you saw earlier, you also get a juicy 3.1% dividend yield, growing at a solid 7% per year over the past 5 years and increasing for 12 consecutive years, which is actually every year that they've been their own public company since spinning off from the likes of Abbott Labs. In terms of valuation, analysts are looking for the company to generate EPS of $14.25 25 cents per share this year, which equates to a forward PE multiple of 15.7 times. And with earnings expected to grow 22% per year on average over the next two years, that gives the company a PEG ratio of 0.7. Not something you see all that often from healthcare companies like AVY. Analysts are still upbeat on the stock, rating it a buy with an average 12-month price target of $252 per share, implying nearly 13% upside to go along with that 3% plus dividend yield. AVY is a stock that rewards patience. And that's going to lead us to the final stock on our list today. Stock number eight is going to be Micron Technology, stock ticker MU. and Micron might be the best example of a stock that's seen insane growth in terms of share price appreciation yet still could be considered cheap. This is an AI memory leader that took the market by storm this past year as demand for memory was huge and is being the clear leader. It gives the company huge amounts of backlog. Micron is cyclical and that's exactly why this opportunity exists. The company currently has a market cap of $351 billion and over the past 12 months, shares are up nearly 240%. Easily one of the best performing stocks in the market in 2025. Micron and its memory is key for all of these advanced chips. Micron and its memory is key for all of these data centers. Micron and its memory is a key clog for all of the AI infrastructure buildout. Looking here at this fiscal AI chart, you can see Micron revenue, operating profits, and margin are all at or near all-time highs. Revenues sit at 42.3 billion, operating profits at 13.7 billion, and operating margins sit at a healthy $ 32.5%. Over the past decade, only one year did the company generate more free cash flow than it did in the past 12 months, which was $4.7 billion. So, at the beginning, I talked about Micron being a cyclical business, and you could see that based on the past results. It's not a smooth ride higher. It is bumpy at times, but looking ahead to 2026 here, I believe this is going to be another solid year. Maybe not 200% gains, but at the same time, companies continue to spend heavily on their AI infrastructure buildout. In terms of valuation, this is where things get a bit wild. Analysts are looking for the company to generate EPS of $321 in fiscal 2026, which actually ends in August. And that equates to a forward PE of just 10.6 times. And with earnings expected to grow 300% this year and 22% next year, even if it was just 22% for both of those years, this stock would still look very cheap. Paying a near singledigit multiple for this type of growth is wild. And I understand it is cyclical and cycles don't disappear, but they also create mispricings and that's what you're getting with Micron. So now we've looked at eight very different companies, ones that I all believe are going to have fantastic years in 2026. Now what this means is we don't just run out and buy all eight of them at the same time. Scale into them. Be patient. And position sizing matters. There's different and varying risk for each of these types of stocks. And maybe some of them aren't great fits for your portfolio. But down in the comments section below, let me know which of these eight stocks, if you could only buy a few of them, which of these would you buy early part of 2026? And if you found any value in today's video, show your appreciation by simply clicking that like button down below. Subscribe to the channel and thanks again [music] for watching and we'll see you in the next one. Take care.