Barron's has highlighted 10 stocks that look overvalued in 2026

Barron's has named ten stocks that look overvalued in terms of price-to-earnings (P/E) ratio ahead of 2026. The publication used a list compiled by Trivariate Research analysts: they selected all companies whose P/E in 2025 exceeded 40 for the first time in recent memory. There were 22 such companies.

Barron's focused only on companies whose P/E has crossed that mark since September. His top 10 included Circle Internet Group (stablecoins, payments), Broadcom (chips, AI) and Oracle (cloud, databases), as well as technology companies Tower Semiconductor (contract chips), MACOM Technology Solutions (radio frequencies, networks), Ciena (fiber optic networks), SailPoint (access control) and Pure Storage (storage). From the industrial sector, Barron's list included Curtiss-Wright (defense, engineering) and Karman Holdings (aerospace, defense).

Historical data shows that investors should treat such stocks with caution, Barron's wrote. Since 2003, stocks with P/E ratios above 40 have underperformed the market by an average of 12 percentage points over the next three years - adjusted for volatility, Barron's noted, citing Trivariate calculations.

Some stocks from this list are already giving alarming signals, says Barron's. For example, the securities of chip maker Broadcom have added 47% in value since the beginning of the year and, according to Trivariate, broke the 40 P/E mark at the end of November. However, in early December, Broadcom shares experienced their worst three-day period in five years, plunging 18%. Meanwhile, its fiscal fourth-quarter earnings report, released in mid-December, beat expectations, Barron's noted.

Circle Internet Group remains another paper with signs of overheating, to which analysts pay attention. The company, which issues USDC stablecoin pegged to the U.S. dollar, held one of the most notable IPOs of this year in June. But while in the first days of trading the share price was up as high as $263, recently the securities have been trading at $88, Barron's notes.

Like Broadcom, Circle has faced heightened market sensitivity to corporate news. In mid-November, the company reported third-quarter earnings that more than tripled Wall Street analysts' expectations. However, pressure on the stock was exerted by the end of the lockup period after the IPO, which coincided in time with the publication of reports and increased investor concerns about the possible increase in the supply of securities from insiders, the publication writes.

Since then, Circle's securities have fallen in price by about 10%. The stock is currently trading at a multiple of about 89 expected earnings for 2026, according to FactSet data cited by Barron's.

This article was AI-translated and verified by a human editor