Five Underperformers in 2025: Why These AI-Driven Laggards Could Reclaim Momentum in 2026

While the artificial intelligence sector has delivered exceptional returns throughout 2023-2025, a peculiar divergence has emerged within the broader AI ecosystem. Five promising technology companies—Snap Inc. [SNAP], Adobe Inc. [ADBE], Marvell Technology Inc. [MRVL], Atlassian Corp. [TEAM], and Workday Inc. [WDAY]—have significantly underperformed the market in 2025 despite maintaining strong fundamentals and favorable analyst ratings. Yet beneath the surface of their disappointing year-to-date returns lies compelling evidence that these laggards may be positioned for substantial recovery and growth in 2026.

All five stocks currently carry either a Zacks Rank #1 (Strong Buy) or #2 (Buy) designation, suggesting institutional confidence in their near-term potential. The disconnect between their 2025 performance and their valuation prospects raises an important question: are these temporary setbacks masking genuine growth catalysts?

Snap’s Strategic Pivot: From Ad-Dependent to AI-Powered Revenue Model

Snap represents perhaps the most dramatic turnaround candidate among our laggards. The platform is fundamentally reshaping its business architecture through a landmark partnership with Perplexity, the conversational AI platform. Under this agreement, Perplexity will allocate $400 million over one year to integrate its AI-powered answer engine into Snapchat’s native chat interface, with revenue contributions commencing in early 2026.

This partnership targets Snap’s 943 million monthly active users—a massive distribution channel for AI services. Rather than competing directly in the AI space, Snap is monetizing its existing user base as a gateway for conversational AI adoption. The company’s recent success with Snapchat+ also demonstrates capacity for premium monetization, with exclusive AI-enhanced features validating the teen-focused user cohort’s willingness to pay.

For next year, Snap projects revenue growth of 13.4% and earnings expansion of 52.3%. The Zacks Consensus Estimate for next-year earnings has improved 2.3% over the last 30 days. Brokerage consensus pricing targets suggest upside of 23% from the last closing price of $8.03, marking a potential inflection point for this laggard.

Adobe’s Generative AI Expansion Across Creative and Enterprise Solutions

Adobe has deployed generative AI capabilities throughout its product ecosystem, from creative tools like Photoshop, Illustrator, and Premiere to enterprise applications like Acrobat and Reader AI Assistant. The introduction of Adobe Firefly earlier this year represented a major leap in the company’s AI ambitions, while the AI Assistant feature accelerates document summarization and task completion workflows.

The company has simultaneously expanded into digital marketing services via its new AI-driven cloud-based platform, offering data mining capabilities that measure page views, conversions, and social media impact. Adobe Marketing Cloud empowers enterprises to deliver personalized experiences across devices and manage multichannel campaigns effectively.

Adobe Express, leveraging generative AI for short-form video editing (now available on iOS and Android), targets the rapidly growing social media content creation market. For the current fiscal year ending November 2026, Adobe expects revenue growth of 9.2% and earnings growth of 13.3%. The Zacks Consensus Estimate for current-year earnings has improved 1% in the last 90 days. Analysts project a 36.8% price increase from the last closing price of $339.12, signaling renewed confidence in this laggard’s recovery trajectory.

Marvell Technology: Data Center Dominance and Optical Interconnect Expansion

Marvell Technology operates as a critical player in solid-state drive controllers, a market experiencing accelerating demand from exponential unstructured data growth across enterprises. In its third-quarter fiscal 2026 results, Marvell demonstrated the strength of this thesis, with revenues climbing 36.8% year-over-year, driven by robust data center expansion and recovery in enterprise networking and carrier infrastructure segments.

The completion of industry-wide inventory normalization is expected to unlock sustained growth momentum across these end markets. More significantly, Marvell’s acquisition of Celestial AI—expected to close in Q1 fiscal 2027—adds a critical strategic asset. Celestial AI’s Photonic Fabric technology platform is purpose-built for scale-up optical interconnect architectures. The company has already secured a major contract with a leading hyperscaler for next-generation scale-up deployment, indicating commercial validation of this technology.

For fiscal 2027, Marvell projects revenue growth of 21.7% and earnings growth of 25.7%. The Zacks Consensus Estimate for next year’s earnings has improved 6.3% over the last seven days. Brokerage price targets suggest 23% upside from the last closing price of $92, positioning Marvell as a compelling recovery play among AI infrastructure laggards.

Atlassian: AI Integration Accelerating Enterprise Adoption and Premium Migration

Atlassian has capitalized on hybrid work trends and digital transformation momentum through rapid deployment of generative AI features across its collaboration software suite. The company’s Atlassian Intelligence brand has achieved remarkable traction: over 1 million monthly active users now engage with AI features, representing a 25-fold year-over-year increase in AI interactions.

The partnership with OpenAI to embed generative AI capabilities into Confluence, Jira Service Management, and adjacent products is accelerating customer migration toward premium and enterprise tiers. These AI-enhanced workflows command pricing power while meaningfully improving employee productivity. Atlassian’s multi-model AI strategy and advanced search capabilities further differentiate its competitive positioning.

For the current fiscal year ending June 2026, Atlassian projects revenue growth of 20.8% and earnings growth of 29.4%. The Zacks Consensus Estimate for current-year earnings has improved 1.3% in the last 30 days. Analyst price targets indicate 46.5% upside potential from the last closing price of $160.74—among the highest recovery scenarios across our laggard cohort.

Workday: Patient Execution Across Diversified Verticals and International Expansion

Workday operates a cloud-based enterprise software platform serving human capital management, financial management, and planning functions across verticals. The company’s diversified customer acquisition across education, healthcare, financial services, retail, and hospitality demonstrates resilience and optionality in its growth trajectory.

The company maintains a strong balance sheet and abundant liquidity, enabling continued investment in product portfolio expansion and strategic M&A. Notably, Elliott Investment Management’s significant stake has injected fresh focus on innovation acceleration. Management’s strategic emphasis on embedding advanced AI and machine learning capabilities into core workflows positions the company to drive long-term competitive differentiation and margin expansion.

For fiscal 2027, Workday expects revenue growth of 12.1% and earnings growth of 17.4%. The Zacks Consensus Estimate for next-year earnings has improved 1% in the last 30 days. Brokerage consensus pricing indicates 24.9% upside from the last closing price of $221, reflecting measured but steady confidence in this diversified software laggard’s recovery.

The Convergence Point: Why 2026 May Unlock Value in 2025’s Underperformers

The common thread across these five laggards is neither weakness in fundamentals nor lack of AI exposure—rather, 2025 appears to have represented a pause in valuation expansion for mature, established technology firms. Meanwhile, each company has demonstrated meaningful progress in AI monetization, user adoption, and competitive positioning.

The combination of strong projected growth rates (ranging from 9.2% to 21.7% revenue expansion), significant earnings acceleration (13.3% to 52.3%), and consensus upside targets averaging 30-40% suggests the market may be repricing these laggards as genuine 2026 beneficiaries of AI adoption maturation across enterprise and consumer segments.

As with any investment thesis, past performance does not guarantee future results, and individual risk tolerance should guide decision-making.