We recently published a list of 10 Best Falling Stocks to Invest in Right Now. In this article, we are going to take a look at where Novo Nordisk A/S (NYSE:NVO) stands against other best falling stocks to invest in right now.
The overall stock market has been in an uptrend, as depicted by major indices trading near all-time highs. The rally has come at the back of several key factors, including artificial intelligence frenzy and optimism about accommodative monetary policies, with the Federal Reserve cutting interest rates.
After two years of consecutive gains, valuations have gotten out of hand, with some stocks trading at levels and multiples not seen in years. The eye-watering valuations are raising concerns among value investors, constantly on the hunt for bargains. Morgan Stanley Wealth Management analysts have also fired warning shots about valuations that have gotten out of hand.
According to analysts’ expectations of earnings growth are too ambitious at a time when it is still unclear what President Donald Trump will do. “Policy uncertainty from the new administration appears underpriced. 2025 is not at all like 2017, and we view the risks as much higher,” said Lisa Shalett, chief investment officer and head of the wealth management unit’s global investment office. According to Shalett, investors are better off diversifying their portfolio by pairing investments in domestic stocks and bonds with equities outside the US.
While the rally in the equity markets has come on growing expectations that the US Fed will cut interest rates aggressively, it could stall as President Trump swings into action. According to UBS CEO Sergio Ermotti, the expected decline in interest rates could be stalled should Trump impose tariffs on allies.
“Something that I’ve been saying for a while, inflation is much stickier than we have been saying. The [truth] of the matter is that we need to see also how tariffs will play a role in inflation. Tariffs will probably not really help inflation to come down. And therefore I don’t see rates coming down as fast as people believe,” Ermotti said at the World Economic Forum in Davos, Switzerland.
Most stocks trading at all-time highs are enjoying premium valuations on investors betting on them amid expectations of lower interest rates. Amid the blockbuster gains, some stocks have gone the opposite way, tanking to levels not seen in years. The selloff that has come into play has given rise to undervalued stocks trading close to their 52-week lows. While the prospects of the selloff persist, stocks are also showing signs of bottoming out. Consequently, the best-falling stocks to invest in are companies backed by solid underlying fundamentals affirming their long-term prospects.
For good reason, economists are upbeat about the US economy and stock market. In the United States, GDP growth has been steady, interest rates are predicted to decline, and the incoming president is firmly pro-business. That presents a perfect environment for fallen stocks with solid fundamentals to bounce back. Since value stocks are already priced at or below their intrinsic value, they should theoretically have a lower downside risk.
Our Methodology
To make our list of the best falling stocks to invest in right now, we scanned the US stock market for stocks that have fallen significantly and are trading close to their 52-week lows (0-10% above). We then settled on the top ten fallen stocks that have the potential to bounce back. We finally ranked these stocks based on their upside potential.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Is Novo Nordisk A/S (NVO) the Best Falling Stock to Invest in Right Now?
An elderly couple receiving insulin from a pharmacist, representing healthcare company's successful pharmaceutical products.
Novo Nordisk A/S (NYSE:NVO) is a healthcare company that researches, develops, manufactures, and distributes pharmaceutical products. After dropping by about 23% in 2024, it is emerging as one of the best-falling stocks to invest in right now. That’s in part because the company boasts of a robust pipeline of weight loss and diabetes drugs that continue to elicit strong demand.
Novo Nordisk A/S (NYSE:NVO) has delivered consistent growth over the years owing to its expansive offerings that include groundbreaking innovations in diabetes and obesity. In the first nine months of last year, the company delivered a 23% increase in sales attributed to Ozempic and Wegovy sales. The two drugs have cemented the company’s position as a leader in diabetes, with a 34% market share.
While the launch of Wegovy affirms the company’s ability to address emerging challenges in obesity, it has also moved to strengthen its prospects with weight loss treatment CagriSema. While Novo Nordisk A/S (NYSE:NVO) took a hit on CagriSema, helping participants lose an average of 22.7% of weight versus 25% expected, the selloff appears to be an overreaction. With the stock trading near its 52-week low, it seems to be trading at a significant discount, going by the tremendous potential of its weight loss and diabetes treatment options.
Overall, NVO ranks 3rd on our list of best falling stocks to invest in right now. As we acknowledge the growth potential of NVO, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
