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Buy 5 Technology Laggards Despite the Sector's Dream Run in 2026
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Key Takeaways
PLTR is among the five tech laggards highlighted despite XLK's 33.2% year-to-date gain.
TEAM's AI-powered Rovo platform and automation tools are driving premium and enterprise growth.
U is seeing ad revenue gains, expanding AI tools and improved margins supporting investment.
U.S. stock markets have been witnessing an astonishing bull run supported by artificial intelligence (AI) trade. For the past three and a half years, AI trade has single-handedly driven Wall Street.
Consequently, the technology sector is flourishing this year. The Information Technology Select Sector SPDR (XLK), one of the 11 broad-sectors of the S&P 500 Index, is the best-performing sector with a return of 33.2% year to date.
Despite these positives, several technology stocks have provided double-digit negative returns this year. Here, we have identified five such technology stocks with a favorable Zacks Rank that have significantly lagged in 2026. However, these stocks have room for growth in the near future.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Palantir Technologies Inc.
Zacks Rank #2 Palantir Technologies’ AI strategy is comprehensive, combining its proprietary Foundry and Gotham platforms with a solid plan to promote AI adoption across both government and commercial sectors.
PLTR’s AI Platform (AIP) is the backbone of these capabilities, enabling organizations to process large datasets and derive real-time insights. This is especially valuable in sectors requiring extensive data integration, such as defense, healthcare, finance and intelligence, where operational efficiency and decision-making speed are critical.
In the government sector, Palantir is aligning its AI strategy with U.S. defense priorities. Its work in high-profile initiatives, such as the Department of Defense’s Open DAGIR project, highlights its ability to modernize military operations through AI-driven solutions where data interoperability and real-time decision-making capabilities are imperative. These capabilities solidify PLTR’s position as a key player in the defense sector.
In the commercial space, Palantir’s AIP boot camps — providing hands-on experience to over 1,000 companies — have proven instrumental in customer acquisition. Boot camps showcase the platform’s capabilities and demonstrate its adaptability across logistics, manufacturing, and supply-chain management. PLTR’s core customer base comprises businesses seeking tailored AI/ML services, particularly large government and corporate clients willing to invest heavily in its systems.
Palantir has an expected revenue and earnings growth rate of 71.8% and 98.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 11.2% over the last 60 days.
Atlassian Corp.
Zacks Rank #1 Atlassian’s AI-powered capabilities are seeing rapid adoption. TEAM’s AI-powered Rovo platform and automation tools are driving significant growth in premium and enterprise editions, demonstrating high demand for AI-enhanced workflows.
Atlassian has been continuously adding millions of monthly active users to Rovo and saw Rovo customers growing their ARR two times faster than customers not using Rovo. Investments in multi-model AI strategies and advanced search capabilities further differentiate TEAM’s offerings in an increasingly competitive landscape.
TEAM’s latest focus on adding generative AI features to some of its collaboration software is likely to drive the top line over the long run. The company has collaborated with OpenAI to enhance the capabilities of its Confluence, Jira Service Management and other programs with generative AI features.
Atlassian has an expected revenue and earnings growth rate of 13.3% and 10.8%, respectively, for the next year (ending June 2027). The Zacks Consensus Estimate for next year’s earnings has improved 13.3% over the last 60 days.
Toast Inc.
Zacks Rank #1 Toast operates a cloud-based digital technology platform for the restaurant industry in the United States, Ireland, India, and internationally. TOST builds software which helps restaurants manage online orders and dine-in orders, operate an on-demand delivery network and integrate payments.
TOST offers a platform of software-as-a-service for restaurant operations and point of sale, such as Toast POS, Toast IQ - a conversational AI, vendor management, multi-location management, kitchen display system, online ordering and delivery.
Toast has an expected revenue and earnings growth rate of 20% and 51.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.7% over the last seven days.
Unity Software Inc.
Zacks Rank #2 Unity Software’s Strategic Grow is benefiting from Vector’s improving prediction and measurement, lifting strategic ad revenues and customer returns. Unity expects momentum to carry into second-quarter 2026, with runtime behavioral data beginning to influence live models later in the quarter.
Create is steadier as subscriptions and consumption expand, aided by Unity AI, web workflows and early commerce capabilities that broaden monetization options. Margin performance has improved, and liquidity is ample, supporting AI investment while addressing upcoming converts over 2026 without sacrificing the roadmap.
Unity AI entered public beta in early May 2026 as an integrated agent tuned for Unity workflows. The company is also expanding web and commerce tooling that helps developers manage catalogs, pricing and payments across mobile, web and PC, creating additional monetization touchpoints.
Unity Software has an expected revenue and earnings growth rate of 13.9% and 19.8%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 0.4% in the last 60 days.
Roper Technologies Inc.
Zacks Rank #2 Roper Technologies is benefiting from strength across its segments. Momentum across the Deltek, Vertafore, PowerPlan and Aderant businesses is aiding the Application Software segment. Solid performance of the ConstructConnect, Subsplash and SoftWriters businesses is boosting the Network Software segment’s performance.
Strength across the Neptune and NDI businesses augurs well for the Technology Enabled Products unit. ROP’s bullish forecast for 2026 sparks optimism. ROP is carrying out successive acquisitions to expand its operations. It is worth noting that acquisitions boosted the company’s sales by 5% in the first quarter of 2026.
Roper Technologies has an expected revenue and earnings growth rate of 8.1% and 9.7%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 2.2% in the last 60 days.
View the Zacks #1 Rank List
Image: Bigstock
Buy 5 Technology Laggards Despite the Sector's Dream Run in 2026
Key Takeaways
U.S. stock markets have been witnessing an astonishing bull run supported by artificial intelligence (AI) trade. For the past three and a half years, AI trade has single-handedly driven Wall Street.
Consequently, the technology sector is flourishing this year. The Information Technology Select Sector SPDR (XLK), one of the 11 broad-sectors of the S&P 500 Index, is the best-performing sector with a return of 33.2% year to date.
Despite these positives, several technology stocks have provided double-digit negative returns this year. Here, we have identified five such technology stocks with a favorable Zacks Rank that have significantly lagged in 2026. However, these stocks have room for growth in the near future.
These are: Palantir Technologies Inc. (PLTR - Free Report) , Atlassian Corp. (TEAM - Free Report) , Toast Inc. (TOST - Free Report) , Unity Software Inc. (U - Free Report) and Roper Technologies Inc. (ROP - Free Report) . Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks year to date.
Image Source: Zacks Investment Research
Palantir Technologies Inc.
Zacks Rank #2 Palantir Technologies’ AI strategy is comprehensive, combining its proprietary Foundry and Gotham platforms with a solid plan to promote AI adoption across both government and commercial sectors.
PLTR’s AI Platform (AIP) is the backbone of these capabilities, enabling organizations to process large datasets and derive real-time insights. This is especially valuable in sectors requiring extensive data integration, such as defense, healthcare, finance and intelligence, where operational efficiency and decision-making speed are critical.
In the government sector, Palantir is aligning its AI strategy with U.S. defense priorities. Its work in high-profile initiatives, such as the Department of Defense’s Open DAGIR project, highlights its ability to modernize military operations through AI-driven solutions where data interoperability and real-time decision-making capabilities are imperative. These capabilities solidify PLTR’s position as a key player in the defense sector.
In the commercial space, Palantir’s AIP boot camps — providing hands-on experience to over 1,000 companies — have proven instrumental in customer acquisition. Boot camps showcase the platform’s capabilities and demonstrate its adaptability across logistics, manufacturing, and supply-chain management. PLTR’s core customer base comprises businesses seeking tailored AI/ML services, particularly large government and corporate clients willing to invest heavily in its systems.
Palantir has an expected revenue and earnings growth rate of 71.8% and 98.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 11.2% over the last 60 days.
Atlassian Corp.
Zacks Rank #1 Atlassian’s AI-powered capabilities are seeing rapid adoption. TEAM’s AI-powered Rovo platform and automation tools are driving significant growth in premium and enterprise editions, demonstrating high demand for AI-enhanced workflows.
Atlassian has been continuously adding millions of monthly active users to Rovo and saw Rovo customers growing their ARR two times faster than customers not using Rovo. Investments in multi-model AI strategies and advanced search capabilities further differentiate TEAM’s offerings in an increasingly competitive landscape.
TEAM’s latest focus on adding generative AI features to some of its collaboration software is likely to drive the top line over the long run. The company has collaborated with OpenAI to enhance the capabilities of its Confluence, Jira Service Management and other programs with generative AI features.
Atlassian has an expected revenue and earnings growth rate of 13.3% and 10.8%, respectively, for the next year (ending June 2027). The Zacks Consensus Estimate for next year’s earnings has improved 13.3% over the last 60 days.
Toast Inc.
Zacks Rank #1 Toast operates a cloud-based digital technology platform for the restaurant industry in the United States, Ireland, India, and internationally. TOST builds software which helps restaurants manage online orders and dine-in orders, operate an on-demand delivery network and integrate payments.
TOST offers a platform of software-as-a-service for restaurant operations and point of sale, such as Toast POS, Toast IQ - a conversational AI, vendor management, multi-location management, kitchen display system, online ordering and delivery.
Toast has an expected revenue and earnings growth rate of 20% and 51.7%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.7% over the last seven days.
Unity Software Inc.
Zacks Rank #2 Unity Software’s Strategic Grow is benefiting from Vector’s improving prediction and measurement, lifting strategic ad revenues and customer returns. Unity expects momentum to carry into second-quarter 2026, with runtime behavioral data beginning to influence live models later in the quarter.
Create is steadier as subscriptions and consumption expand, aided by Unity AI, web workflows and early commerce capabilities that broaden monetization options. Margin performance has improved, and liquidity is ample, supporting AI investment while addressing upcoming converts over 2026 without sacrificing the roadmap.
Unity AI entered public beta in early May 2026 as an integrated agent tuned for Unity workflows. The company is also expanding web and commerce tooling that helps developers manage catalogs, pricing and payments across mobile, web and PC, creating additional monetization touchpoints.
Unity Software has an expected revenue and earnings growth rate of 13.9% and 19.8%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 0.4% in the last 60 days.
Roper Technologies Inc.
Zacks Rank #2 Roper Technologies is benefiting from strength across its segments. Momentum across the Deltek, Vertafore, PowerPlan and Aderant businesses is aiding the Application Software segment. Solid performance of the ConstructConnect, Subsplash and SoftWriters businesses is boosting the Network Software segment’s performance.
Strength across the Neptune and NDI businesses augurs well for the Technology Enabled Products unit. ROP’s bullish forecast for 2026 sparks optimism. ROP is carrying out successive acquisitions to expand its operations. It is worth noting that acquisitions boosted the company’s sales by 5% in the first quarter of 2026.
Roper Technologies has an expected revenue and earnings growth rate of 8.1% and 9.7%, respectively, for the current year. The Zacks Consensus Estimate for the current-year earnings has improved 2.2% in the last 60 days.