Although it may be counterintuitive, it makes sense to buy stocks when they're down. Getting a great deal can lead to huge gains that you might not see if a stock is overpriced.
There are several caveats to that, though. Most importantly, it only works if you can find amazing stocks that you can be confident about. Stocks that are falling because there's trouble on the horizon could be value traps.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
If you're looking for top stocks that are down right now but could soar soon, Shopify (NASDAQ: SHOP), SoFi Technologies (NASDAQ: SOFI), Revolve Group (NYSE: RVLV), Nu Holdings (NYSE: NU), and RH (NYSE: RH) are excellent choices.
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1. Shopify: 37% off highs
Shopify is a leader in e-commerce, but it doesn't sell products; it sells e-commerce services like websites and payment processing. It has moved from a model catering to small businesses to a full-service commerce model with components and packages to meet demand at every stage and size.
It's growing rapidly as well as becoming highly profitable. In the 2025 first quarter, revenue increased 27% year over year, and operating income was up 136%. It's benefiting from the organic tailwinds of increasing e-commerce sales, and it has other growth drivers in launching new features and expanding internationally.
Shopify stock fell when pandemic-fueled growth began to decelerate and it built out too quickly before demand dropped. It's gotten itself into great shape, though, and it's likely to surpass its previous highs and climb higher.
2. SoFi: 40% off highs
SoFi is an online bank that's growing quickly, attracting new members at high rates and becoming profitable. Adjusted net revenue increased 33% year over year in the first quarter, and it added 800,000 new members. The low-cost, fee-based financial services segment increased 101% over last year, and that's boosting profits. Adjusted earnings per share (EPS) were up from $0.02 last year to $0.06 this year in the quarter.
The company has expanded from its roots as a loan business, and that's helping protect it while interest rates have been high. But the loan business is improving, too, with lower default and delinquency rates in the first quarter.
SoFi stock soared to astronomical valuations when it went public in a strong bull market, and it couldn't sustain its unreasonable levels when inflation hit and interest rates were raised. But it's rallying now, and it has incredible long-term opportunities.
3. Revolve: 76% off highs
Revolve sells clothing, shoes, and accessories on its fashion websites, and it uses artificial intelligence (AI) to drive sales and savings. It works with celebrities and social media influencers to reach its target audience of young, stylish shoppers, and it has developed a robust digital presence and loyal following. Sales had been declining when inflation was climbing, but active customers and orders placed have continued to rise, and sales and profits are climbing again. In the first quarter, sales increased 10% year over year, while net income rose 5%. As usual, active customers increased, 6% year over year, and total orders placed were up 4%.
As more companies start to imitate its digital, AI, and social media model, Revolve has a first-mover's edge. When the economy is in a better place, Revolve is well positioned to thrive.
4. Nu: 23% off highs
Nu is an all-digital bank and financial services company operating in Brazil, Mexico, and Colombia. It is a leader in disrupting the traditional banking sector in its region, and it's bringing in customers at a rapid pace. It already has more than half of the adult population in Brazil as members, but it's still adding new ones to the tune of about 1 million monthly, and this is in part because it has gone beyond its original core customers who couldn't access the banking system, which has high barriers to entry, and it's now targeting a more affluent consumer base. As fast as it's growing in its hometown of Brazil, it's growing even faster in Mexico and Colombia, and it sees international expansion down the line.
It reports high growth every quarter, with a 40% sales increase year over year in the first quarter. Net income increased 74% to $557 million, and the interest-earning portfolio was up 62%.
Nu fell earlier this year when investors were worried about high inflation and instability in Brazil, and on the news that Buffett sold out of it. But it's back in favor with the market because it doesn't have exposure to U.S. tariffs, and there's massive long-term potential.
5. RH: 74% off highs
RH is a luxury furnishings retailer, but it's styling itself these days as a global luxury brand. It has a small list of global galleries, most of which are in affluent cities in the U.S., but it's been expanding with stores in the United Kingdom and other large European cities. It also owns several restaurants and offers "experiences" like a guesthouse and yacht rentals.
It has a fair amount of resilience since it targets an upscale crowd, but even that hasn't been able to pull it through inflation without damage as consumers put discretionary items on hold. However, it might be on the rebound. It reported solid results in the 2025 fiscal first quarter, including a 12% year-over-year increase in revenue and a 7% adjusted operating margin.
It may take time for RH to get back to its previous highs, but as it turns a corner, now looks like a good time to buy.
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Jennifer Saibil has positions in Nu Holdings and SoFi Technologies. The Motley Fool has positions in and recommends Revolve Group and Shopify. The Motley Fool recommends Nu Holdings and RH. The Motley Fool has a disclosure policy.
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