It’s been a rough stretch for growth stocks. The AI trade has cooled, and Nvidia (NVDA -4.06%) just lost its legendary CEO. And to say that the stock market has been volatile since the midterm elections would be an understatement.
However, when markets get choppy, some great businesses get dragged down with everything else, and that’s when I like to go shopping. Here are five stocks down 40% or more from their highs that I’d buy right now.
Image source: Getty Images.
1. Forgent Power Solutions
Forgent Power Solutions (FPS -6.30%) makes the electrical gear that data centers need. Its stock is more than 60% below its 52-week high of $66. But despite the stock performance, its business is booming. Revenue rose 69% in its fiscal first quarter, and management raised its fiscal 2027 guidance to $2.45 billion to $2.65 billion, saying its backlog already covers it. I own Forgent, and I think the market is focused on the wrong numbers.
2. Rocket Lab
Rocket Lab (RKLB -5.78%) is also down more than 60% from its $151 high. Its Neutron rocket has been delayed to 2027 at the earliest, but the rest of the business is accelerating. Third-quarter revenue grew 73% to a record $267.8 million, its backlog jumped 52% in a single quarter to about $3.6 billion, and it has about $4.45 billion in cash. I don’t own Rocket Lab yet, but it’s high on my watch list.
RKLB Rocket Lab
$60.37-$3.70 (-5.78%)
NASDAQ · As of 10:22 AM ET 11/13/26
3. Lemonade
Lemonade (LMND -0.16%) has fallen about 57% from its 52-week high. The AI-powered insurer grew in-force premium by 34% to $1.55 billion last quarter and expects its first positive adjusted EBITDA quarter in the fourth quarter. Lemonade’s auto insurance product, Lemonade Car, is growing rapidly, and underwriting profitability has been trending in the right direction for the past few years.
Perhaps the most impressive statistic is that Lemonade’s top-line growth rate has now accelerated for 12 consecutive quarters. Lemonade isn’t without risk, but I think the profitability inflection is underappreciated.
4. Marvell Technology
Marvell Technology (MRVL -8.53%) is about 50% below its 52-week high. Investors didn’t love its $115 billion all-stock deal to acquire Lumentum (LITE -8.67%), which has lost more than a third of its value since the deal was announced. But the combination would make Marvell a major player in the optical connections that AI data centers need.
MRVL Marvell Technology
$150.42-$14.03 (-8.53%)
NASDAQ · As of 10:24 AM ET 11/13/26
The business behind the stock is doing very well. In its latest fiscal quarter, Marvell’s revenue rose 37% year over year to a record $2.74 billion, and growth in its data center business accelerated to 46%. Management expects about $3.15 billion in third-quarter revenue, representing another 15% jump from the second quarter alone.
5. Comfort Systems USA
Comfort Systems USA (FIX -3.61%) builds the mechanical and electrical systems inside data centers and factories, and it’s about 45% below its high. Its third-quarter revenue rose 54% to $3.77 billion, earnings per share jumped to $13.91 from $8.25, and its backlog hit a record $17.8 billion. That backlog is nearly twice the $9.4 billion it had a year earlier, and it’s more than a year’s worth of work at the current revenue pace. In other words, Comfort Systems has already lined up much of its growth for the next year, so the stock’s decline looks more like a broad pullback in AI-related stocks than a problem with the business.
How I’m buying
Of course, stocks that fall 40% can keep falling, especially in a market like this one. So I’m selectively and gradually adding to some positions, while maintaining a watch list of stocks to take advantage of dips. Having said all that, each of these companies is growing quickly and has fallen for reasons that look temporary to me. If I’m right, today’s prices could look like bargains a few years from now.
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Matt Frankel, CFP® has positions in Forgent Power Solutions and Lemonade and has the following options: short September 2026 $140 calls on Lemonade. The Motley Fool has positions in and recommends Comfort Systems USA, Forgent Power Solutions, Lemonade, Lumentum, Marvell Technology, Nvidia, and Rocket Lab. The Motley Fool has a disclosure policy.
