Value stocks are making a 2025 comeback as rising rates, sticky inflation, and a rotation out of crowded tech trades push investors toward undervalued, dividend-paying names.
Sectors & Industries
August 14, 2025
Table of Contents
In a market dominated by growth narratives and speculative AI bets, value stocks are quietly regaining their relevance. These are companies trading below their intrinsic value often due to market overreactions, cyclical slowdowns, or misunderstood fundamentals. But as macro uncertainty rises and investor sentiment shifts, value is back in focus.
Value stocks are shares of companies that appear undervalued relative to their financial performance. They typically trade at low price-to-earnings (P/E), price-to-book (P/B), or price-to-sales (P/S) ratios compared to industry peers.
Rather than chasing explosive growth, value investing focuses on long-term fundamentals. The goal is to buy strong companies at a discount and hold until the market corrects the price.
In 2025, several macro conditions have tilted the market in favor of value:
A typical value stock tends to exhibit:
These companies often operate in mature industries, think industrials, energy, financials, or manufacturing but still offer consistent returns through operational efficiency or market positioning.
Progressive is one of the top three auto insurers in the U.S., with a strong presence in personal auto, commercial vehicle, property, and specialty insurance. The company is a digital-first insurer, often outperforming peers in terms of underwriting accuracy and customer acquisition cost through its proprietary data-driven pricing models.
Progressive expanded its commercial insurance business to support the surging demand from gig economy drivers and last-mile delivery fleets. It also launched new AI-based tools for predictive risk scoring and fraud detection, announced on October 15, 2024, which utilize machine learning to analyze driver data and telematics for real-time risk assessment and fraud identification, improving claim efficiency and reducing payout losses.
Additionally, Progressive introduced the Flo Chatbot on February 4, 2020, an Azure AI-powered, voice-enabled conversational tool featuring the iconic Flo spokesperson. This chatbot provides personalized insurance advice, answers customer queries, and directs users to Progressive’s website or agents, enhancing digital customer experiences through platforms like Google Assistant.
Progressive’s monthly snapshot for Q2 2025 showed policy-in-force growth of over 8% year-over-year, and its combined ratio (a key profitability metric) improved despite industry headwinds from severe weather events in Q1.
With rising used car prices and increased auto financing activity, Progressive benefits from higher policy premiums. Its disciplined underwriting and tech-led approach support consistent earnings. The company also recently raised its quarterly dividend by 12%, signaling confidence in cash flow.
Market Performance:
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Palantir is a pioneer in enterprise data integration and analysis platforms. Its software is widely used by defense, intelligence, healthcare, and commercial sectors. Gotham serves government clients for intelligence and battlefield data, while Foundry supports commercial data fusion and decision-making.
In 2025, Palantir continues to ride the wave of government digitization. The company secured a $300 million multi-year deal with the U.S. Department of Defense in March 2025, and was awarded a NATO contract to deploy AI-driven mission analytics. On the commercial side, it expanded partnerships with major banks to apply AI for anti-money laundering and risk compliance.
In Q2 2025 earnings, Palantir reported 50% year-over-year commercial revenue growth in the U.S., reflecting traction beyond government contracts. Its AIP (Artificial Intelligence Platform), launched in late 2024, is gaining adoption among Fortune 500 companies for AI model deployment and compliance.
Palantir is shifting from a primarily government contractor to a broader enterprise AI platform provider. While still richly valued on traditional metrics, its revenue visibility and positioning in AI-national security convergence make it a compelling value for long-term investors.
Market Performance:
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Bank of America is a leading global financial institution offering services across banking, investment, wealth management, and corporate lending. It operates more than 4,000 financial centers and serves clients across all 50 U.S. states and over 35 countries.
In 2025, BAC benefited from Fed rate stability and rising demand for retail credit. In Q2, the bank posted a 9% rise in net interest income, driven by strong loan growth and improved credit card activity. The company also announced a $30 billion stock buyback program in April, reflecting confidence in its capital position.
Bank of America has also been expanding its digital offerings. With 90% of transactions now digital, it launched new AI-powered wealth management features under Merrill Edge, enhancing client retention and advisor efficiency.
BAC trades at a discount compared to other large-cap banks, with a forward P/E ratio under 10. Its strong balance sheet, shareholder returns, and exposure to consumer lending make it attractive for value investors seeking financial sector exposure in a high-rate environment.
Market Performance:
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Eli Lilly is a leading innovator in pharmaceuticals, particularly known for its dominance in diabetes and obesity treatments. Its GLP-1 drugs, including Mounjaro and Zepbound, have reshaped the global weight-loss and diabetes market and are poised for continued growth as new indications and formulations roll out.
In 2025, Eli Lilly began building a $2.5 billion production plant in North Carolina to meet overwhelming demand for Zepbound, its FDA-approved weight-loss medication. It is also accelerating trials for oral versions of GLP-1 therapies, which could further expand patient access and boost margins.
Additionally, the company reported $14.5 billion in Q1 2025 revenue, a 29% increase from the previous year, driven by strong sales in obesity and oncology segments. Analysts project further upside if oral GLP-1s gain approval by early 2026.
LLY is no longer just a drugmaker it’s become a dominant force in the global wellness and metabolic health trend. Its pricing power, R&D pipeline, and strong IP protection create long-term value, even at a premium valuation.
Market Performance:
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Broadcom is a diversified tech powerhouse offering semiconductors for networking, broadband, and AI infrastructure, as well as enterprise software solutions following its acquisition of VMware. It serves hyperscalers, telecom firms, and large enterprises with a mix of hardware and SaaS offerings.
Broadcom finalized its $69 billion acquisition of VMware in late 2024 and has since integrated the unit into its software division. In Q2 2025, it launched custom AI accelerator chips for private cloud deployments gaining market share against Nvidia and AMD in select enterprise segments.
The company is also expanding its AI chip partnerships with cloud providers and recently signed a multi-year supply agreement with Amazon Web Services for next-gen networking components.
Broadcom combines the stability of recurring software revenue with exposure to AI infrastructure growth. Despite trade risks, its broad customer base, high margins, and diversified supply chain offer value in a sector prone to hype cycles.
Market Performance:
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NVIDIA is the global leader in GPU and AI hardware development. Its H100 and next-gen Blackwell chips are the backbone of generative AI and LLM workloads across hyperscale data centers, autonomous vehicles, and scientific research.
Despite a $5.5 billion revenue hit from expanded U.S. export restrictions to China, NVIDIA reported a record-breaking Q1 2025 with $26 billion in revenue, a 260% increase from the same quarter last year. The company has shifted focus to non-China markets, securing large-scale deals with AWS, Meta, and Oracle for AI infrastructure.
NVIDIA is also diversifying into AI software, with its NIM (NVIDIA Inference Microservices) platform gaining traction among enterprise developers. Meanwhile, it announced plans to open a new $3 billion chip packaging facility in Arizona to localize parts of its supply chain.
While priced at a premium, NVIDIA remains central to the AI arms race. Investors betting on multi-decade AI adoption may see value in its dominant position especially as it builds new hardware-software ecosystems to maintain competitive moat.
Market Performance:
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If you’re serious about finding value stocks before they get repriced, combining valuation screens with real-time event detection can be the edge you’re looking for.
Value stocks are shares of companies trading below their intrinsic value, often measured by metrics like price-to-earnings (P/E), price-to-book (P/B), or price-to-sales (P/S) ratios. These stocks typically have stable earnings, strong cash flows, and are overlooked or undervalued by the broader market. They are often found in mature industries such as financials, energy, industrials, and healthcare.
The 7% rule is a guideline used in technical trading that suggests selling a stock if it drops 7% below your purchase price to limit losses. Popularized by William O’Neil, the rule is part of a risk management strategy designed to protect capital by cutting losing positions early before deeper losses accumulate.
The best value stocks typically have low valuation ratios, consistent profitability, and strong fundamentals. As of 2025, notable examples include Progressive (PGR), Bank of America (BAC), Eli Lilly (LLY), Palantir Technologies (PLTR), Broadcom (AVGO), and NVIDIA (NVDA)—especially when temporary setbacks or macro conditions create attractive entry points.
The most valuable stocks are those with the highest market capitalizations. As of mid-2025, the top 10 include:
These companies dominate their respective sectors and often lead global market indices.
Top stock picks vary based on goals, but in 2025, investors are closely watching:
These stocks combine strong financials, macro tailwinds, and future growth drivers.
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