Five Dow Stocks Down 10%+ in 2025: A Contrarian's Playground for 2026

Understanding Contrarian Investing in a Bull Market

When the broader market rallies—the Dow Jones Industrial Average posted a 14%+ gain through December 2025—most investors chase momentum. But true contrarian investors think differently. They recognize that market weakness in individual stocks often presents opportunity, especially when underlying business fundamentals remain intact.

This dynamic explains why Home Depot (HD), Procter & Gamble (PG), Nike (NKE), Salesforce (CRM), and UnitedHealth Group (UNH) have become potential contrarian plays despite their significant declines. Each faces distinct headwinds, yet each possesses the characteristics that value investors typically seek: depressed valuations, strong market positions, and business models designed to weather cycles.

The Consumer Spending Weakness Impact: Home Depot, P&G, and Nike

Consumer sentiment has deteriorated despite record equity indices. Rising living costs, persistent inflation concerns, tariffs, and trade policy uncertainty have left households hesitant to spend—particularly on discretionary items. This dynamic has created a sharp divergence between stock market performance and actual purchasing behavior.

Home Depot’s struggle exemplifies this trend. The home improvement retailer depends on consumer confidence and disposable income for major renovation projects. With sentiment weak, earnings have stalled. Yet the company hasn’t stopped investing in long-term competitive advantages through acquisitions and store expansion. When consumer psychology shifts—and history suggests it will—Home Depot will be positioned to capitalize. Trading at a reasonable 24.1x forward earnings with a 2.7% dividend yield, the stock offers patient investors both value and income.

Procter & Gamble faces similar pressures, though from a different angle. The entire consumer staples sector has underperformed dramatically, down 0.4% in 2025 versus the S&P 500’s 17.8% surge. Even sector stalwarts like Costco are experiencing relative weakness. Tariffs have compressed supply chain margins, while household balance sheets too weak to absorb cost increases. Yet P&G’s diversified product portfolio, international revenue streams, elite supply chain management, and pricing power have enabled it to maintain margins despite headwinds. The company continues growing earnings, albeit slowly. With 69 consecutive years of dividend increases and a 2.9% yield, P&G represents a contrarian opportunity in a temporarily depressed sector.

Nike presents a more complex turnaround scenario. The athletic apparel giant has stumbled for four consecutive years—pressured by tariffs, China’s economic slowdown, and North American consumer caution. More fundamentally, competitive intensity has increased and product innovation momentum has slowed. Nike is recalibrating its strategy, emphasizing storytelling and brand authenticity rather than relying solely on distribution efficiency. Gross margin recovery depends on reducing discounts and markdowns. Apple CEO Tim Cook’s recent stake increase signals insider confidence, though skeptics may want to see concrete turnaround evidence. The 2.7% dividend yield provides downside cushion.

The AI Disruption Challenge: Salesforce’s Pricing Model Test

Salesforce occupies a different risk category: AI-driven industry disruption. The SaaS model traditionally scales by expanding user bases and revenue per user. But if artificial intelligence enables enterprises to operate with fewer subscriptions—achieving more with less—the model breaks. This uncertainty has triggered a broad software sector selloff.

Salesforce isn’t passive. It’s deploying AI agents as virtual assistants to accelerate workflows and productivity. Its Agentforce pricing model, while potentially costly due to per-user add-ons, attempts to capture AI value creation. The company benefits from massive incumbent adoption—customers typically prefer incremental improvements to familiar platforms over switching risk. Salesforce’s ownership of Slack, Tableau, and MuleSoft extends its reach across the enterprise software value chain.

Despite slowing growth, the company remains profitable with high margins. At just 22.6x forward earnings and a 0.6% dividend yield, Salesforce’s risks appear priced in. For long-term investors, the question is whether AI disruption ends the SaaS model or simply evolves it—and Salesforce’s scale positions it to navigate either scenario.

The Perfect Storm Scenario: UnitedHealth’s Repricing

UnitedHealth represents the most severe decline: down roughly one-third in 2025. The health insurance giant miscalculated medical cost inflation and Medicare Advantage utilization rates while simultaneously facing Department of Justice scrutiny. On the surface, this appears catastrophic.

Yet this intensity creates a contrarian opportunity. When consensus turns uniformly negative, the risk-reward often inverts. UnitedHealth operates two complementary segments: UnitedHealthcare (collecting premiums across Medicare, Medicaid, employer, and individual channels) and Optum (providing health services). Together, they generate steady cash flow when executing properly. The company is actively raising premiums to reflect higher costs—a necessary correction that should improve 2026 results.

At 20.3x forward earnings with a 2.7% dividend yield, UnitedHealth is trading like a value stock. Industry leadership combined with severe out-of-favor status suggests the worst-case scenarios may already be embedded in the price.

The Contrarian Framework for 2026

All five stocks share a characteristic that contrarian investors exploit: market pessimism has outrun business fundamentals. Each company possesses competitive moats, cash generation capacity, and management teams capable of navigating challenges. Price declines have compressed valuations to levels that historically precede recoveries.

Contrarian investing requires patience and conviction. These stocks may remain weak in the near term. But for investors with multi-year horizons, the risk-reward asymmetry—substantial downside already experienced, meaningful upside if operations normalize—favors accumulation at current levels.