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January Effect 2026: 4 Beaten-Down Stocks Poised for a Strong Rebound
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Key Takeaways
Stocks pressured by AI bubble fears and macro headwinds in 2025 may rebound as year-end selling eases.
Broader AI adoption across industries is expected to drive efficiency gains, margins, and growth in 2026.
Stronger enterprise demand for AI platforms is boosting customer adoption and improving earnings outlooks.
In 2025, businesses across sectors witnessed rapid artificial intelligence (AI) advancements that shaped their growth trajectory.The growing concern of an AI bubble along with ongoing tariff war, macroeconomic and geopolitical headwinds has been a dampener on several stock performances. Nevertheless, these beaten-down stocks are expected to ride on the January Effect. The year-end dip offers an opportunity for investors to pick up stocks with solid fundamentals and strong earnings growth prospects.
The January Effect essentially means that stocks heavily sold toward the end of the year, often for tax-loss harvesting purposes, tend to rebound in early January as selling pressure eases. We pick four beaten-down stocks, nCino (NCNO - Free Report) , Global-e Online (GLBE - Free Report) , GitLab (GTLB - Free Report) and Samsara (IOT - Free Report) , which are expected to offer strong growth opportunities for investors in 2026.
AI Push to Drive Momentum in 2026
Continued integration and adoption of AI across sectors is expected to be a key catalyst. Enterprises are increasingly using AI to improve operations, optimize supply chains, and make better decisions. Companies that have invested in AI-driven analytics, predictive maintenance, and automated customer engagement are likely to see better margins and faster growth. Across sectors like enterprise software, financial services, industrial operations, and global e-commerce, AI is allowing faster workflows, better risk management, real-time operational insights, and more personalized customer experiences.
International Data Corporation (IDC) expects the global AI infrastructure market to hit a massive $758 billion by 2029, driven by strong demand for compute and storage hardware. IDC expects momentum in AI investment to continue in 2026, driven by strong spending from hyperscalers and cloud service providers. According to Gartner, global AI spending is expected to exceed $2 trillion in 2026 compared with an estimated $1.5 trillion in 2025.
4 Beaten-Down Stocks Poised for a Strong Rebound
nCino – This Zacks Rank #1 (Strong Buy) company’s AI-powered solutions, such as Banking Advisor and role-based AI agents, are expected to drive demand in 2026. You can see the complete list of today's Zacks #1 Rank stocks here.
Financial institutions are increasingly seeking operational efficiency and modernization, with AI playing a significant role. In the third quarter of fiscal 2026, more than 110 customers have purchased these Banking Advisor intelligence units. nCino plans to have approximately 100 Banking Advisor capabilities available by the end of fiscal 2026, up from 18 announced earlier in May.
The Zacks Consensus Estimate for nCino’s fiscal 2026 earnings is currently pegged at 89 cents per share, which has increased 14% over the past 30 days, indicating an increase of 36.92% year over year. NCNO stock has lost 21.7% in the trailing 12-month period.
Global-e Online - Another Zacks Rank #1 company, Global-E Online is benefiting from the integration of AI across its operations, which has enhanced efficiency, customer experience and positioned the company for future growth. The company is actively preparing its solutions to work seamlessly with agentic commerce platforms for instant checkout, ensuring it remains at the forefront of global e-commerce innovation.
Global-e Online is also seeing early traction with AI-driven sales channels, including transactions initiated through platforms like ChatGPT and agent-assisted in-chat checkout. These channels represent promising future opportunities.
The Zacks Consensus Estimate for Global-e Online’s fiscal 2026 earnings is currently pegged at 94 cents per share, which has increased by a couple of pennies over the past 30 days, indicating an increase of 177.06% year over year. Shares of the company have plunged 27.4% in the trailing 12-month period.
GitLab – This Zacks Rank #2 (Buy) stock has plunged 33% in the trailing 12-month period.
However, GTLB is benefiting from strong enterprise demand for its AI-native DevSecOps platform, driven by the growing need for secure, efficient, and scalable software development solutions. GitLab’s focus on expanding its product offerings, such as GitLab Duo and Dedicated, is driving customer engagement and platform adoption.
In the third quarter of fiscal 2026, customers with more than $5K of Annual Recurring Revenue (ARR) increased 10% year over year to 10,475. Customers with more than $100K of ARR increased to 1,405, up 23% year over year, demonstrating GTLB’s ability to attract and retain large enterprise customers.
The Zacks Consensus Estimate for GTLB’s fiscal 2026 earnings is currently pegged at 88 cents per share, which has increased 6% over the past 30 days, indicating an increase of 18.92% year over year.
Samsara – This Zacks Rank #2 stock has lost 16.9% in the trailing 12-month period. However, IOT’s prospects benefit from its advanced AI capabilities. In the third quarter of fiscal 2026, Samsara introduced new AI-powered features like Automated Coaching, Group Coaching, and Workflow Automations, which helped customers scale its operations and improve safety and efficiency.
IOT’s AI-driven solutions, including dual-facing AI dash cameras and real-time in-cab alerts, have demonstrated remarkable results, such as reducing accidents by up to 73% after 30 months.
The Zacks Consensus Estimate for Samsara’s fiscal 2026 earnings is currently pegged at 50 cents per share, which has increased 6.38% over the past 30 days, indicating an increase of 92.31% year over year.
Image: Bigstock
January Effect 2026: 4 Beaten-Down Stocks Poised for a Strong Rebound
Key Takeaways
In 2025, businesses across sectors witnessed rapid artificial intelligence (AI) advancements that shaped their growth trajectory.The growing concern of an AI bubble along with ongoing tariff war, macroeconomic and geopolitical headwinds has been a dampener on several stock performances. Nevertheless, these beaten-down stocks are expected to ride on the January Effect. The year-end dip offers an opportunity for investors to pick up stocks with solid fundamentals and strong earnings growth prospects.
The January Effect essentially means that stocks heavily sold toward the end of the year, often for tax-loss harvesting purposes, tend to rebound in early January as selling pressure eases. We pick four beaten-down stocks, nCino (NCNO - Free Report) , Global-e Online (GLBE - Free Report) , GitLab (GTLB - Free Report) and Samsara (IOT - Free Report) , which are expected to offer strong growth opportunities for investors in 2026.
AI Push to Drive Momentum in 2026
Continued integration and adoption of AI across sectors is expected to be a key catalyst. Enterprises are increasingly using AI to improve operations, optimize supply chains, and make better decisions. Companies that have invested in AI-driven analytics, predictive maintenance, and automated customer engagement are likely to see better margins and faster growth. Across sectors like enterprise software, financial services, industrial operations, and global e-commerce, AI is allowing faster workflows, better risk management, real-time operational insights, and more personalized customer experiences.
International Data Corporation (IDC) expects the global AI infrastructure market to hit a massive $758 billion by 2029, driven by strong demand for compute and storage hardware. IDC expects momentum in AI investment to continue in 2026, driven by strong spending from hyperscalers and cloud service providers. According to Gartner, global AI spending is expected to exceed $2 trillion in 2026 compared with an estimated $1.5 trillion in 2025.
4 Beaten-Down Stocks Poised for a Strong Rebound
nCino – This Zacks Rank #1 (Strong Buy) company’s AI-powered solutions, such as Banking Advisor and role-based AI agents, are expected to drive demand in 2026. You can see the complete list of today's Zacks #1 Rank stocks here.
Financial institutions are increasingly seeking operational efficiency and modernization, with AI playing a significant role. In the third quarter of fiscal 2026, more than 110 customers have purchased these Banking Advisor intelligence units. nCino plans to have approximately 100 Banking Advisor capabilities available by the end of fiscal 2026, up from 18 announced earlier in May.
The Zacks Consensus Estimate for nCino’s fiscal 2026 earnings is currently pegged at 89 cents per share, which has increased 14% over the past 30 days, indicating an increase of 36.92% year over year. NCNO stock has lost 21.7% in the trailing 12-month period.
nCino Inc. Price and Consensus
nCino Inc. price-consensus-chart | nCino Inc. Quote
Global-e Online - Another Zacks Rank #1 company, Global-E Online is benefiting from the integration of AI across its operations, which has enhanced efficiency, customer experience and positioned the company for future growth. The company is actively preparing its solutions to work seamlessly with agentic commerce platforms for instant checkout, ensuring it remains at the forefront of global e-commerce innovation.
Global-e Online is also seeing early traction with AI-driven sales channels, including transactions initiated through platforms like ChatGPT and agent-assisted in-chat checkout. These channels represent promising future opportunities.
The Zacks Consensus Estimate for Global-e Online’s fiscal 2026 earnings is currently pegged at 94 cents per share, which has increased by a couple of pennies over the past 30 days, indicating an increase of 177.06% year over year. Shares of the company have plunged 27.4% in the trailing 12-month period.
Global-e Online Ltd. Price and Consensus
Global-e Online Ltd. price-consensus-chart | Global-e Online Ltd. Quote
GitLab – This Zacks Rank #2 (Buy) stock has plunged 33% in the trailing 12-month period.
However, GTLB is benefiting from strong enterprise demand for its AI-native DevSecOps platform, driven by the growing need for secure, efficient, and scalable software development solutions. GitLab’s focus on expanding its product offerings, such as GitLab Duo and Dedicated, is driving customer engagement and platform adoption.
In the third quarter of fiscal 2026, customers with more than $5K of Annual Recurring Revenue (ARR) increased 10% year over year to 10,475. Customers with more than $100K of ARR increased to 1,405, up 23% year over year, demonstrating GTLB’s ability to attract and retain large enterprise customers.
The Zacks Consensus Estimate for GTLB’s fiscal 2026 earnings is currently pegged at 88 cents per share, which has increased 6% over the past 30 days, indicating an increase of 18.92% year over year.
GitLab Inc. Price and Consensus
GitLab Inc. price-consensus-chart | GitLab Inc. Quote
Samsara – This Zacks Rank #2 stock has lost 16.9% in the trailing 12-month period. However, IOT’s prospects benefit from its advanced AI capabilities. In the third quarter of fiscal 2026, Samsara introduced new AI-powered features like Automated Coaching, Group Coaching, and Workflow Automations, which helped customers scale its operations and improve safety and efficiency.
IOT’s AI-driven solutions, including dual-facing AI dash cameras and real-time in-cab alerts, have demonstrated remarkable results, such as reducing accidents by up to 73% after 30 months.
The Zacks Consensus Estimate for Samsara’s fiscal 2026 earnings is currently pegged at 50 cents per share, which has increased 6.38% over the past 30 days, indicating an increase of 92.31% year over year.
Samsara Inc. Price and Consensus
Samsara Inc. price-consensus-chart | Samsara Inc. Quote