3 Stocks Near 52-Week Lows Ready for a Rebound
One of the biggest mistakes investors make when trading their portfolios and putting capital to work is staying away from discounts. It is human nature to avoid a stock chart that has been down and to the right as fears of a continuation in the same direction start to kick in. However, investors should recognize that this is where most of the greatest opportunities are born.
Today's list includes a few stocks that trade near their 52-week lows, meaning that some of the worst-case scenarios, whatever they are, have likely been priced into the stocks by now. Whenever this happens, investors are left with a fantastic risk-to-reward setup moving forward, with a capped downside and all of the upside in an open field ahead. Considering the recent S&P 500 volatility, this is exactly what investors should look for today.
The best part is that these stocks aren't some fly-by-night names; these are some of the United States' largest companies, like Microsoft Co. (NASDAQ: MSFT) and Advanced Micro Devices Inc. (NASDAQ: AMD), which have fallen behind despite the mania and excitement around the technology sector today. An opportunity is found in shares of Target Co. (NYSE: TGT), a retail name that seems to be irrationally beaten down by trade tariff fears in the economy.
Microsoft’s Discount Won’t Last Much Longer
Even the bearish traders in the market know that a stock like Microsoft, with its $2.8 trillion market capitalization and massive market share in the global technology landscape, cannot trade near its 52-week lows for longer than a couple of days or weeks out of the year.
This is why, even though the stock has declined by 7.5% for the month of February 2025 alone, short sellers have decided that the juice left in this short trade is not worth the squeeze, so they’ve pulled back to collapse Microsoft’s short interest by as much as 14.2% over the past month alone, a clear sign of bearish capitulation in the face of strong fundamentals.
Now that the stock trades at 80% of its 52-week high and awfully close to its 52-week low, chances are the worst has been priced into the stock already, leaving investors with all the upside. This upside, according to Wall Street analysts, looks more like a 34% rally implied in their $509.5 consensus price target set today.
It’s not often that investors can get a double-digit upside from such a massive company, much less being able to buy it near its lows for the year.
An Oversold Fear of Tariffs in Target Stock
The fear of more expensive imports in the United States has caused many to sell out of Target stock, believing that its margins and volumes will collapse in the face of these developments. However, even if this scenario plays out in the coming months, the bearish scenario has likely been oversubscribed today.
At only 62% of its 52-week highs, Target stock is now one of the most attractive buys in the market today, especially if trade tariff fears begin to de-escalate in the coming months. In fact, some on Wall Street are willing to express their optimism for this discounted stock today.
Institutional buyers from UBS Asset Management decided to boost their holdings in Target stock by 14.4% as of February 2025, bringing their net position to a high of $513.5 million today, a clear vote of confidence through buying the dip in Target. Then, the current earnings per share (EPS) forecasts from Wall Street show no signs of tariff impact.
By forecasting up to $2.47 in EPS for the fourth quarter of 2025, analysts imply an uptrend from today’s $2.41 in EPS, not something that would be published if tariffs did in fact pose a risk to Target’s margins and bottom-line.
Advanced Micro Device’s Catch-Up
The darling of the semiconductor industry has been NVIDIA Co. (NASDAQ: NVDA) for the past couple of years. However, that attention has kept other worthy names out of the loop during that same period, and that’s where Advanced Micro Devices comes into play.
By trading at a dismal 48% of its 52-week high, whatever bearish case is floating around has already been priced in and even overpriced. This leaves Wall Street analysts with a so-called “low-hanging fruit” to pick off and boost their reputations when this stock inevitably catches up to the rest of the pack.
With a consensus price target set at $155.8 per share, analysts are calling for a rally of up to 61% from where the stock has fallen to today, leaving investors with massive upside and very little downside risk at today’s lows. As this stock also fits the criteria for low-risk and high-upside, UBS Asset Management decided to step into it as well.
After boosting their holdings by 9.9% as of February 2025, the institutional group now holds up to $2.6 billion worth of Advanced Micro Devices stock, or 1.3% ownership in the company, giving investors the vote of confidence they need for this stock moving forward.
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