Pricey but Promising: 3 High P/E Ratio Stocks with Over 40% Upside in 2026

Using the TipRanks Stock Screener Tool, we identified three companies with high price-to-earnings (P/E) ratios, Strong Buy consensus ratings, and more than 40% upside potential over the next 12 months, making them compelling opportunities for growth-focused investors.Claim 70% Off TipRanks This Holiday SeasonUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential An investment's true worth comes from its expected future growth. A high P/E ratio can suggest overpricing, yet it often mirrors optimism about rapid earnings growth. The essential step is to compare current prices with the anticipated growth trajectory. Buying high P/E stocks means betting on companies with robust fundamentals, continuous innovation, and growing markets. Here Are This Week's High P/E Stocks Datadog (DDOG) – Datadog's P/E ratio of 460x is astronomically higher than the sector average of about 31x. On TipRanks, the average Datadog price target of $215.99 implies a massive 59% upside potential from current levels. Meanwhile, DDOG stock has lost 5% over the past year. Datadog is a cloud tool that combines monitoring of infrastructure, application performance, logs, and security to give real-time visibility into your tech stack. Datadog's strong market position in cloud-native observability, combined with a broad product mix, supports durable demand as more companies move to multi-cloud environments. Plus, its expanding product lineup offers upsell potential and larger wallet share as organizations mature. However, as a high-valuation SaaS stock, it carries risks from potential slower growth, longer profitability timelines, broader tech-market sentiment, and competition that could pressure margins. Alibaba (BABA) – Alibaba has a P/E ratio of 19.5x, which tops the sector average of about 16.2x and its own five-year average of 13.7x. On TipRanks, the average Alibaba price target of $205.08 implies nearly 40% upside potential from current levels. Meanwhile, BABA stock has rocketed over 72% in 2025. Alibaba is a major Chinese e-commerce company that also boasts a fast-growing cloud and AI unit, as well as Cainiao logistics. The company recently stated that demand for AI-related cloud services is rising, driven by firms building generative AI apps, and its Qwen AI models are gaining traction across multilingual tasks. Meanwhile, its core e-commerce business remains stable, backed by its extensive network of online marketplaces, delivery services, and consumer apps. Nvidia (NVDA) – Nvidia has a P/E ratio of 46.2x, which is about 48% higher than the sector average of 31x. On TipRanks, the average Nvidia price target of $262.79 implies an impressive 41% upside potential from current levels. Meanwhile, NVDA stock has surged nearly 35% in 2025. Nvidia is widely regarded as the AI leader, holding a lion's share of the multi-billion-dollar global chip market. A $5 trillion market cap would naturally entail a high P/E ratio, but with even greater growth prospects. Nvidia sits at the center of the fast-growing AI and data-center demand, with top-tier GPU technology and expanding product lines that support durable growth as AI adoption accelerates. It also benefits from a large and growing addressable market in data centers, cloud computing, and AI infrastructure, offering potential multi-year upside despite short-term fluctuations. To find more stocks like these, explore TipRanks' Stock Screener Tool, which provides an updated list of stocks that can be filtered and scanned using various parameters.