Watch these stocks that can see strong returns ahead, per Goldman
Goldman Sachs is expecting another good year for stock pickers and has some stocks to watch. The S & P 500 in 2024 hit its highest annual dispersion levels since 2007 when excluding recessions, according to chief U.S. equity strategist David Kostin. This points to less correlation between individual stocks, creating more opportunities for investors to pick their spots and potentially beat the broader market. “For active stock-pickers this reflected a favorable environment for alpha generation,” Kostin said, referring to a measure of risk-adjusted returns. “From a fundamental perspective, the healthy return dispersion environment in 2024 was marked by declining macroeconomic uncertainty and the growing importance of thematic debates around AI and the US election,” Kostin added. The market has been more micro-driven than usual since the start of 2023, Kostin said. That isn’t expected to change anytime soon, with high return dispersion expected to continue this year. That outlook for 2025 is based in part on expectations for healthy economic growth and the continued differentiation between stocks based on their exposure to artificial intelligence, the strategist said. Given this backdrop, Kostin’s team looked for stocks that could generate the strongest returns based on company-specific drivers. He calculated this using a dispersion score. In other words, the higher the score, the stronger the potential risk-adjusted return. Here are 10 names that made the list: Super Micro Computer led the way with a score of nearly 32. This comes amid a strong period for shares. The stock has surged more than 75% in 2025 alone, putting it on track to notch its seventh straight winning year. One major idiosyncratic driver for the stock is the potential of easing regulatory scrutiny. Earlier this month, the company said it was confident it will meet a key U.S. Securities and Exchange Commission deadline. Wall Street analysts see a pullback ahead after that big run, however. Most of the ones polled by LSEG have a hold rating, with a price target reflecting downside of more than 16%. Enphase trailed with the second-highest score of S & P 500 stocks at 20.5. Unlike Super Micro, the energy stock slid 5% in 2025 and is now on track for its third negative year in a row. The majority of analysts also have a hold rating on the stock, per LSEG. But the typical price target implies shares can bounce more than 21% over the next year. The stocks on this list could also see increased volatility, as some have in the past. Super Micro, for example, rallied more than 300% at one point last year before tumbling more than 85% from that peak.
