Over the past three years, many investors have favored tech stocks, particularly popular companies in the artificial intelligence space. From Nvidia to Google’s parent company Alphabet, these stocks have led the S&P 500 higher. But in recent weeks, investors have become more cautious, worried about adverse factors such as unrest in Iran and U.S. economic growth.
This has led to a shift in market direction. Investors are no longer piling into AI stocks and are instead rotating into other sectors perceived as safe, such as healthcare and retail — on the grounds that no matter what happens in the world, people need necessities like medicine and groceries.
As a result, since the start of the year, two previously lackluster stocks in these sectors have outperformed the S&P 500. The question now is: Are they still worth buying?
Moderna (MRNA) became a focus in the early days of the pandemic, rapidly developing and commercializing a COVID-19 vaccine. The vaccine generated substantial revenue, peaking at over $18 billion in 2022. At the time, this was Moderna’s only product, so the company relied on it for growth — and as vaccine demand declined in the post-pandemic period, investors fled the biotech stock.
From its peak price, the stock had fallen 90% by the end of 2025. But in recent weeks, investors have returned to Moderna, viewing it as a potentially safe stock that could offer growth opportunities during a recovery. The biotech company has laid out a plan to restore growth, including cost cuts and a focus on three key areas: seasonal vaccines, oncology, and rare diseases. The company currently markets two COVID vaccines and one respiratory syncytial virus (RSV) vaccine, and regulators are reviewing its influenza vaccine candidate. The company expects revenue from its seasonal vaccine business to help fund the development of other projects.
Recovery and growth may be on the horizon: Moderna recently reaffirmed its forecast of up to 10% revenue growth this year. Since the start of the year, the stock has risen nearly 70%. Is it still a buy? Moderna is a great stock to own, and a new growth phase may lie ahead, but it has risen rapidly in a short time — investors may want to look for opportunities to buy this top biotech stock on dips.
Target (TGT) is another company that excelled in the early days of the pandemic but faced challenges in subsequent years. In the early pandemic, consumers appreciated Target’s digital presence and its pickup and delivery options, which helped the retailer significantly increase revenue.
In recent years, however, Target has faced numerous challenges. Some customers have favored the low-price strategies of rival Walmart. Target angered some customers when it introduced diversity, equity, and inclusion policies, and then upset others when it rolled those policies back. Customers have also complained about product selection, inventory levels, and customer service. All these factors have weighed on growth and stock performance.
But Target has taken significant steps to turn things around. Michael Fiddelke, who rose through the ranks from intern to chief operating officer and recently to chief executive officer, has developed a formal plan. The plan includes improving merchandise displays and store layouts, updating product assortments, and providing new training for employees. These and other efforts involve an investment of $2 billion this year alone — part of a multi-year plan.
Investors clearly like this strategy and have so far signaled their approval of Fiddelke, with the stock rising more than 20% since the start of the year. Target’s forward price-to-earnings ratio is 14, far below retail peers such as Walmart and Costco — which are above 40 — and Target is in the early stages of a turnaround story. All of this suggests that Target’s stock may have room to rise from current levels, making it a quality retail stock worth buying right now.
Overall, both Moderna and Target have benefited this year from investors rotating out of high-volatility tech stocks and into defensive sectors. Moderna has gained market confidence thanks to its vaccine business recovery and cost-cutting plans, but its sharp short-term gains suggest waiting for a pullback before entering. Target, on the other hand, has won investor recognition through strategic efforts such as store remodeling and product assortment adjustments. Its valuation remains attractive compared to peers, and its turnaround is still in the early stages. Both stocks offer certain growth potential, but the timing of investment should be carefully considered based on their respective risk-return profiles.
