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Exclusive Content These 3 Stocks Trade at Discounts the Market Won't Ignore ForeverSubmitted by Dan Schmidt. First Published: 1/5/2026. 
Key Points - The S&P 500 posted another gain above 15% in 2025, but the market is now approaching historically concerning valuation levels.
- When valuations are elevated, slowing earnings growth is harshly punished, and investors often turn to value stocks for safety.
- These three large-cap stocks all trade well below their industry-average P/E ratios, which could help protect against market volatility in 2026.
The S&P 500 wrapped up 2025 with a total return of about 18% — the third straight year above historical norms, though below the standout 25% returns of 2023 and 2024. AI euphoria remains the dominant market trend entering 2026, and the usual suspects like NVIDIA Corp. (NASDAQ: NVDA) and Alphabet Inc. (NASDAQ: GOOGL) rose again on the first trading day. If you've ridden the AI rally since the market bottomed in 2022, you're likely sitting on substantial gains and may feel compelled to diversify, especially if you have a tech-heavy allocation. The S&P 500 is entering the year trading at roughly 26x forward earnings, a stark elevation above its 20-year average of about 16x. When valuations are this high, investors demand robust earnings growth, and high-multiple stocks can fall out of favor quickly if growth slows. If interest rates remain elevated, 2026 could be the year value investing reasserts itself. 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(NASDAQ: CMCSA) was among the biggest victims of the cord-cutting revolution, as customers migrated from expensive cable packages to a la carte streaming services. CMCSA is about five months away from completing a so-called "lost decade" — trading near the same price it did in May 2016. Now, customers are showing cord-cutting fatigue as streaming services raise prices and clash with major networks. Meanwhile, Comcast has quietly built a solid balance sheet and diversified revenue streams. Its forward price-to-earnings (P/E) ratio of about 6.84 is well below the communications industry average (16.5) and that of competitors such as The Walt Disney Co. (NYSE: DIS) and AT&T Inc. (NYSE: T).  Comcast's broadband business remains a steady, high-margin cash machine. Despite Connectivity and Platforms revenue slowing 1.4% year-over-year in Q3 2025, EBITDA margins for the residential and business segments were 37% and 56%, respectively. The advertising business should get a lift in 2026: NBCUniversal holds broadcast rights for Super Bowl LX, the FIFA World Cup and the Winter Olympics in Italy. The company generated $4.9 billion in free cash flow in Q3, continuing to support its 4.4% dividend. Comcast's value story may not remain a secret much longer — the stock is up nearly 10% over the past 30 days, and technical indicators point to further upside. Micron: An Essential AI Stock Trading at a Deep Discount How can a stock that posted roughly a 200% gain in 2025 still be considered undervalued? Despite its parabolic 2025, Micron Technology Inc. (NASDAQ: MU) remains relatively inexpensive among AI-related names, trading at about 29x forward earnings while the broader tech group sits near 75x. A P/E of 29 isn't cheap versus the broader market, but it's an attractive valuation for a company generating 57% year-over-year quarterly revenue growth, roughly 57% gross margins, and consistently raising guidance.  Memory is a high-margin business, and Micron's management says it is struggling to keep up with insatiable demand from data centers. Technically, the stock is in a healthy uptrend with support along the 50-day simple moving average (SMA). That aligns with TradeSmith's Health indicator — MU shares sit in the Green Zone, which signals a strong trend with orderly pullbacks. Pfizer: Fueling Pipeline Innovation Through Acquisitions Shares of healthcare giant Pfizer Inc. (NYSE: PFE) have struggled since the COVID-19 pandemic receded; the stock is down more than 30% over the past five years. Competitors such as Eli Lilly and Co. (NYSE: LLY) have outpaced Pfizer thanks to obesity drugs like Mounjaro. Pfizer now trades near historical valuation lows (about 8.4x forward earnings), significantly cheaper than most large-cap pharmaceutical peers. The company's acquisition of Seagen has begun to bolster its oncology business, contributing more than $6 billion in revenue since the deal closed in 2023.  Although Pfizer's pivot into the obesity drug market has been gradual, it now has a growing pipeline after acquiring two smaller drugmakers with oral and injectable treatment options. The market has largely discounted Pfizer in this space, which helps explain the valuation gap. Low expectations can create opportunities — the stock doesn't yet reflect potential successful inroads into the GLP‑1 market. Additionally, Pfizer is an appealing defensive holding thanks to its low valuation and history of dividend growth.
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