For several high-profile growth stocks, share price performance in 2025 ended up being forgettable. These stocks didn't just underperform. They lost ground.
However, if you can take a step back and look at the bigger picture, there are at least a couple of these cases where this weakness is likely only a temporary setback. Indeed, these pullbacks offer an opportunity for investors to get in front of a recovery in 2026.
Here's a closer look at two of these best bets.
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DraftKings
It's pretty clear why shares of sports-betting name DraftKings (DKNG 0.04%) lost 8% of their value last year (and closed 35% below their 2025 peak). Not only is the company's growth slowing down now that most of the industry's low-hanging fruit has been picked, but prediction-market platforms like Kalshi and Polymarket are now making inroads on DraftKings' sports-waging turf. It's not an issue for investors to simply dismiss.
Worries that an alternative like Polymarket or Kalshi could significantly disrupt DraftKings' growth plans, however, are overblown.
NASDAQ: DKNG
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The key here is the power of the brand name itself. DraftKings was a well-known fantasy sports platform well before sports-betting's federal ban was lifted back in 2018, and, even now, the name is as much of a marketing tool as it is a means of betting on sporting events. It's now partnering with NBCUniversal's sports broadcasting arm, for instance, integrating its wagering tech with the media giant's sports entertainment programming. It's also now the official sportsbook and odds provider for ESPN. These are promotional opportunities that players like Polymarket and Kalshi just aren't going to get.
To the extent it matters, DraftKings is getting into the prediction market business for itself, while casino-style gaming accounts for nearly half of its revenue.
Investors should start to be reminded of the upside of this broad revenue mix at some point sooner rather than later this year.
Recursion Pharmaceuticals
The other name to look for a 2026 recovery rally from following last year's 44% pullback is Recursion Pharmaceuticals (RXRX 4.64%). See, this is the year that could prove the company's entire premise holds water.
But what is it? In simplest terms, Recursion has created an artificial intelligence-powered drug discovery platform. Called Recursion OS, this tool can access 65 petabytes (65 million gigabytes) of chemical, biological, and molecular data to virtually determine how a prospective drug might perform as a therapy.
NASDAQ: RXRX
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It doesn't replace real-world testing, to be clear; the FDA still requires actual clinical trials. This sort of pre-clinical testing saves a massive amount of time and money, however, by allowing pharmaceutical companies to focus resources on their most promising drug prospects.
As for why 2026 is going to be markedly different than 2025, it could start offering more serious proof of the potential of its tech. Not only is an update for one of the drugs it helped develop on the calendar, but two more Recursion-discovered drugs could begin phase 1 clinical testing. This ultimately means more meaningful revenue, which is very tangible to interested investors. As of the latest look, analysts are calling for 2026 revenue of $83 million, well up from 2025's expected $63 million. This top-line growth should also take a sizable bite out of Recursion Pharmaceuticals' lingering losses, underscoring the business's potential for eventual viability.
