2 Undervalued Stocks With High Potential to Double in 2026 Amid AI and Market Shifts

In an era of rapid technological disruption and shifting consumer preferences, value investors are increasingly turning to high-growth sectors where undervalued companies are poised to capitalize on transformative trends. Two such names-Sweetgreen (NYSE: SG) and Amplitude (NASDAQ: AMPL)-stand out as compelling long-term opportunities. Both are navigating industry headwinds while leveraging innovation and strategic reinvention to unlock value. Here's why these stocks warrant serious consideration for a 2026 turnaround.

Sweetgreen: A Restaurant Turnaround Built on Automation and Digital Engagement

Sweetgreen's Q4 2024 earnings report was a mixed bag: the company missed both revenue and EPS estimates, reporting $160.9 million in revenue and a loss of $0.25 per share. Yet, these short-term stumbles mask a broader narrative of resilience. For the full year, Sweetgreen achieved 15% revenue growth to $676.8 million, marking its fourth consecutive year of double-digit sales expansion. More importantly, it posted its first full year of positive adjusted EBITDA at $18.7 million, a critical milestone for a company long criticized for weak unit economics.

The key to Sweetgreen's turnaround lies in its Infinite Kitchen initiative, an automated production system designed to reduce labor and cost-of-goods-sold (COGS) expenses. With 12 locations already operational and plans to expand to 20 more in 2025, this technology-driven approach addresses two of the restaurant industry's most persistent challenges: rising labor costs and operational inefficiencies. Analysts at William Blair note that the Infinite Kitchen could stabilize same-store sales growth, which dipped to 6% in 2024 amid macroeconomic pressures.

Complementing this operational overhaul is Sweetgreen's digital-first strategy. Digital sales now account for 60% of total revenue, driven by the SG Rewards loyalty program, which is acquiring 20,000 new customers weekly. This digital engagement, combined with menu innovation (e.g., Ripple Fries and a Michelin-starred chef collaboration in 2025), positions the company to capture a broader demographic. While the stock fell 10% post-earnings, this reaction appears overdone, given the company's strong balance sheet and aggressive 2025 expansion plans (40 new restaurants).

Amplitude: AI-Powered SaaS Growth in a Fragmented Market

Amplitude's story is one of strategic reinvention in the AI-driven SaaS sector. The company reported Q4 2024 revenue of $78.1 million, a 9% year-over-year increase, with ARR reaching $312 million. While it remains unprofitable (GAAP net loss of $0.26 per share), its non-GAAP net income of $0.02 per share and 16% growth in high-ARR customers (now 591) signal improving unit economics.

Amplitude's differentiation lies in its AI-powered analytics platform, which enables enterprises to derive actionable insights from customer data. The acquisition of Command AI and the launch of tools like AI Agents and Surveys underscore its commitment to staying ahead of the curve. Analysts at Forrester recently named Amplitude a "Leader and Customer Favorite" in digital analytics, a testament to its product depth and enterprise traction.

Valuation metrics suggest Amplitude is undervalued. A DCF analysis estimates its intrinsic value at $34.94, a 71% discount to its current price, while a narrative-driven model pegs fair value at $15.67. Analysts are bullish: UBS upgraded the stock to "Buy" with a $13 price target, and DA Davidson raised its target to $16, reflecting confidence in its AI monetization potential. With 2025 Q1 ARR growing 12% year-over-year to $320 million, Amplitude is well-positioned to benefit from the AI SaaS sector's valuation premium for platforms delivering measurable ROI.

Catalysts and Risks

Sweetgreen faces near-term risks, including macroeconomic volatility and competition from fast-casual rivals like Chipotle and Panera. However, its focus on automation and digital loyalty programs creates a durable moat. If same-store sales stabilize and Infinite Kitchens scale, the stock could rebound sharply.

Amplitude must prove it can monetize its AI tools effectively. While enterprise adoption is growing, reliance on key customers and the need for continued R&D investment remain challenges. That said, its strategic integration with AWS and recognition as a Forrester leader provides a strong foundation for 2026 growth.

Conclusion: Strategic Bets for a Transformative Year

Both Sweetgreen and Amplitude exemplify the value-investing principle of buying into companies with strong fundamentals and clear catalysts. Sweetgreen's operational turnaround and Amplitude's AI-driven SaaS innovation align with macro trends that could drive outsized returns by 2026. For investors willing to look beyond short-term volatility, these stocks offer compelling upside potential.