- The CAC 40 experienced a significant rally in 2025, climbing more than 10% and setting new records.
- However, this market euphoria was not universal.
- Large segments of the index were left behind, creating a divide between high-performing leaders and undervalued laggards.
- As the market looks toward 2026, attention is turning to these overlooked stocks.
Quick Summary
The CAC 40 delivered a strong performance in 2025, registering a gain of more than 10% and achieving a new record high. This surge reflected a period of market euphoria, but the benefits were not distributed evenly across the board.
Entire sectors of the French stock market index remained detached from this upward momentum. As a result, a significant portion of the market was left behind, creating a distinct divergence between the index leaders and the rest of the pack. This sets the stage for a potential shift in 2026, where these undervalued assets may finally see their fortunes reverse.
A Tale of Two Markets in 2025
The CAC 40 closed out 2025 on a high note, with the index climbing over 10% throughout the year. This performance culminated in the index inscribing a new all-time record, driven by a handful of mega-cap stocks that dominated market returns.
However, this headline figure masks a more complex reality. The market rally was characterized by its narrow breadth. While the index soared, significant parts of the French corporate landscape struggled to gain traction. This indicates that the market euphoria was concentrated, leaving many established companies undervalued as the year concluded.
The Undervalued Segments 📉
The core of the analysis focuses on the pans entiers de la cote—entire sections of the listed companies—that were excluded from the 2025 rally. These companies represent diverse sectors of the economy that failed to capture investor enthusiasm despite the broader market optimism.
The divergence suggests that market sentiment was highly selective. Investors focused heavily on specific growth narratives, leaving other sectors to trade at lower valuations. The following areas were notably absent from the euphoria:
- Traditional industrial sectors
- Domestic-focused service providers
- Companies with lower growth profiles
These overlooked segments now represent the primary area of interest for the upcoming year.
Outlook for 2026: The Rebound Potential
The stage is set for a potential rotation in 2026. After a year where the CAC 40 was driven by a select group of stocks, market dynamics suggest that capital may flow into the undervalued areas that were previously ignored.
The thesis for a rebound rests on the relative valuation gap. Stocks that did not participate in the 2025 surge are trading at more attractive price points compared to the index leaders. If market sentiment broadens in 2026, these assets are well-positioned to recover lost ground and contribute to the index's performance in a way they did not in the previous year.
Conclusion: Finding Value in Neglect
The record-breaking year of 2025 for the CAC 40 was defined as much by who was left out as by who led the charge. The 10% gain was impressive, but the silence from the rest of the market speaks volumes about current valuations.
As we move through 2026, the focus shifts from chasing the winners of the past year to identifying value in the stocks that were neglected. The potential for a rebound in these undervalued sectors offers a compelling narrative for the year ahead, suggesting that the market's euphoria may finally spread to the broader index constituents.
Frequently Asked Questions
What happened to the CAC 40 in 2025?
The CAC 40 rose by more than 10% and reached a new record high, driven by a narrow group of stocks.
Which stocks are expected to rebound in 2026?
Stocks and sectors that were overlooked and did not participate in the 2025 market euphoria are the focus for a potential rebound.
