On January 8, Nancy Prial, Co-CEO & Senior Portfolio Manager at Essex Investment Management, appeared on CNBC to suggest that she sees big 2026 upside beyond mega-cap tech. Amidst the current market dynamics, Prial emphasized that such volatility underscores the necessity of a well-diversified portfolio. She advised clients to maintain a balance between highly popular market areas and companies that have not been as favored, as this structure helps weather sudden market shifts. Furthermore, she suggested that headline risk is often temporary, drawing a comparison to the previous year’s tariffs, and should be viewed as an opportunity to layer into stocks and sectors. This approach allows investors to buy into areas where valuations are becoming more attractive due to current events. A crucial part of this strategy is maintaining a long-term time horizon, which Prial described as a rare commodity, urging investors to be patient until stocks return to favor.
A day before that, Jay Woods, Chief Market Strategist at Freedom Capital Markets, also joined CNBC to suggest that stocks are broadening beyond tech and noted that increased participation in the market’s upside is a bullish signal. While technology, specifically software, is identified as the primary laggard, Woods introduced clear lines of demarcation from a technical perspective to categorize other sectors. In analyzing the first three days of the trading year, he highlighted three specific sectors. The energy sector was described as a fake-out. In contrast, the materials sector was identified as a success, having broken out of a year-long base with room for further growth. Additionally, the defense sector is cited as having a major breakout, offering an alternative to picking individual defense stocks.
That being said, we’re here with a list of the 10 cheap S&P 500 stocks to invest in now.
Our Methodology
We used the Yahoo stock screener to compile a list of the S&P 500 stocks that had a forward P/E ratio under 15. We then selected 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q3 2025.
Note: All data was sourced on January 12.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10 Cheap S&P 500 Stocks to Invest in Now
10. Delta Air Lines Inc. (NYSE:DAL)
Forward P/E Ratio as of January 12: 9.64
Number of Hedge Fund Holders: 70
Delta Air Lines Inc. (NYSE:DAL) is one of the cheap S&P 500 stocks to invest in now. On January 12, Barclays raised the firm’s price target on Delta Air Lines to $85 from $65 while maintaining an Overweight rating on the shares. This decision was made as the firm revised its airline targets and cited positive catalysts for 2026. With demand momentum from late 2025 carrying over and industry growth slowing, airlines are facing favorable year-over-year comparisons.
On January 9, Susquehanna analyst Christopher Stathoulopoulos raised the firm’s price target on Delta Air Lines to $85 from $70 and kept a Positive rating on the shares as part of a Q4 2025 preview. The firm anticipates a favorable fundamental environment for the airline industry heading into 2026 and noted that specific carriers like Delta Air Lines Inc. (NYSE:DAL) are well-positioned to utilize strong brand loyalty and diversified revenue streams.
Furthermore, on December 7, TD Cowen increased its price target for Delta Air Lines to $82, up from the previous $77, while reiterating its Buy rating on the shares. This adjustment comes as part of the firm’s broader Q4 sector preview, which analyzed how the airline industry managed recent operational challenges. The sector handled a recent shutdown better than many anticipated.
Delta Air Lines Inc. (NYSE:DAL) provides scheduled air transportation for passengers and cargo in the US and internationally. The company operates through two segments: Airline and Refinery.
9. Bristol-Myers Squibb Company (NYSE:BMY)
Forward P/E Ratio as of January 12: 9.23
Number of Hedge Fund Holders: 76
Bristol-Myers Squibb Company (NYSE:BMY) is one of the cheap S&P 500 stocks to invest in now. On January 12, Bristol-Myers Squibb announced positive topline results from its Phase 3 SCOUT-HCM clinical trial. This study evaluated Camzyos (mavacamten), which is a cardiac myosin inhibitor/CMI, in adolescent patients aged 12 to under 18 years suffering from symptomatic obstructive hypertrophic cardiomyopathy/oHCM. This rare genetic disease causes heart muscle thickening that obstructs blood flow, leading to significant fatigue and restricted physical activity in young patients.
The SCOUT-HCM trial successfully met its primary endpoint by demonstrating a statistically significant reduction in the Valsalva left ventricular outflow tract/LVOT gradient at Week 28 compared to a placebo. This measurement indicates that the medication effectively reduced the physical obstruction in the heart. Furthermore, the trial reached statistical significance across multiple secondary endpoints. These results suggest that Camzyos could become the first CMI specifically approved for the adolescent population, who currently rely on limited medical management or invasive surgeries.
Camzyos functions as a selective, reversible, allosteric inhibitor of cardiac myosin. It targets the underlying pathophysiology of HCM by inhibiting the formation of excess myosin-actin cross-bridges in the sarcomere, which reduces the heart’s hypercontractility. By easing the dynamic LVOT obstruction and improving cardiac filling pressures, the therapy helps patients become more active in their daily lives. Currently, 4,000+ healthcare providers in the US use this treatment for adults with symptomatic NYHA class II-III oHCM. However, Bristol-Myers Squibb Company’s (NYSE:BMY) Camzyos also carries a Boxed Warning regarding the risk of heart failure.
Bristol-Myers Squibb Company (NYSE:BMY) discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide.
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