In this piece, we discuss the 10 Undervalued Stocks to Invest in According to Goldman Sachs.
Goldman Sachs released its 2026 Economic and Financial Market Outlook report on January 12, 2026, in which it reported that the economy is starting the new year with strong momentum and dismissed concerns of a widespread recession.
While the investment bank acknowledged policy shocks in 2025, including a tariff spike and a downturn in immigration, that adversely impacted real wages, labor supply, and confidence, Goldman describes the slowdown as orderly rather than disruptive. Policy shocks did push unemployment upward, but not significantly, whereas consumer spending, nearly 70% of U.S. GDP, is largely in line with its long-term growth trend, thanks to rising equity and home prices.
Looking back, the bank views last year’s challenges as policy-driven and temporary, with the inflationary impact of tariffs described as a one-time price-level shift. Meanwhile, most of the pass-through has already been absorbed by the market, according to Goldman Sachs, with wage demands remaining muted. Moreover, broader inflation is projected to ease as wage growth softens and rental rates settle at their lowest level in more than a decade. The firm forecasts core PCE inflation to slow down from 2.9% at the start of the year to roughly 2.3% by the year-end. Additionally, two Federal Reserve rate cuts are projected this year, which should bring policy close to neutral, according to the bank.
Discussing growth, Goldman Sachs favors artificial intelligence (AI), expecting sustained technology investment to support demand and contribute significantly to GDP without an unsustainable level of borrowing, unlike in past economic booms that ended badly. The bank noted that corporate balance sheets remain relatively healthy, with non-financial business debt declining as a share of GDP.
Against this backdrop, Goldman Sachs assigns a 25% probability of a recession this year, below the 33% consensus. In this projected scenario, where earnings growth is expected to remain strong despite heightened index-level valuations, investors are increasingly searching for areas where pricing and fundamentals diverge.
On this note, let’s now look at the 10 Undervalued Stocks to Invest in According to Goldman Sachs.
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Our Methodology
To curate our list of the 10 undervalued stocks to invest in according to Goldman Sachs, we scanned Goldman Sachs’ 13-F filings. Next, we filtered out stocks trading at the lowest forward price-to-earnings multiple as of January 19, 2025. Finally, we ranked these stocks in ascending order by the number of hedge funds holding stakes in each. We assessed hedge fund sentiment for each stock using Insider Monkey’s hedge fund database, which tracks 978 stocks as of Q3 2025.
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. T-Mobile US, Inc. (NASDAQ:TMUS)
Forward Price-to-Earnings Multiple: 15.72x
Number of Hedge Fund Holders: 81
T-Mobile US, Inc. (NASDAQ:TMUS) is one of the 10 Goldman Sachs undervalued stocks to invest in.
On January 16, 2026, T-Mobile US, Inc. (NASDAQ:TMUS) saw Bernstein lower its price target from $265 to $245, while reiterating a ‘Market Perform’ rating. The firm’s updated stance reflects a structural shift in the competitive dynamics across the U.S. telecom sector. The firm highlighted the competition in the sector that intensified every quarter in 2025, eroding the telco gains recorded in the first half. While acknowledging margin pressure within the traditional wireless segment, the investment firm highlighted challenges in the cable operators segment as well, reflecting on the broader industry challenges. Looking ahead, Bernstein expects the increasing competition to persist and limited short-term stabilization to occur.
Meanwhile, on January 7, 2026, Scotiabank reduced its price target on T-Mobile US, Inc. (NASDAQ:TMUS) from $278.00 to $270.50, reiterating an ‘Outperform’ rating. While acknowledging the promotional activity that rose during the holiday season, the investment bank emphasized positive industry-wide revenue and EBITDA growth trends. The firm signals resilience in underlying demand despite aggressive pricing.
T-Mobile US, Inc. (NASDAQ:TMUS) focuses on providing wireless voice, messaging, and data services. It serves postpaid, prepaid, and wholesale customers with its nationwide 5G-focused network footprint.
9. AT&T Inc. (NYSE:T)
Forward Price-to-Earnings Multiple: 10.63x
Number of Hedge Fund Holders: 84
AT&T Inc. (NYSE:T) is included in our list of the 10 Goldman Sachs undervalued stocks to invest in.
On January 16, 2026, AT&T Inc.’s (NYSE:T) price target was reduced by Bernstein from $31.00 to $30.00, with ‘Outperform’ rating remaining intact. The update came as the firm views 2026 as a year of heightened competition in the sector. This stance builds on the trend of increasing competition seen in the previous year. The investment firm discussed challenges in both the cable operator and traditional wireless segments, reflecting broader industry headwinds. Looking ahead, the firm expects limited stabilization, with competition projected to remain elevated in 2026.
Meanwhile, on January 8, 2026, AT&T Inc. (NYSE:T) announced the launch of AT&T IoT Network Intelligence, an innovative solution that offers enterprises deeper visibility into the performance of 4G- and 5G-connected devices. Looking ahead, the company aims to capitalize on the platform’s device-level KPIs, location-based insights, and analytics capabilities, which position IoT as a key long-term growth catalyst, driving the company’s growth by enhancing efficiency and security for customers.
AT&T Inc. (NYSE:T) offers wireless, broadband, and wireline telecommunications services across the U.S., as well as additional wireless operations in Mexico. It serves consumers and enterprises through its Communications and Latin America segments.
8. Adobe Inc. (NASDAQ:ADBE)
Forward Price-to-Earnings Multiple: 12.58x
Number of Hedge Fund Holders: 88
Adobe Inc. (NASDAQ:ADBE) is one of the 10 Goldman Sachs undervalued stocks to invest in.
As of January 16, 2026, investor sentiment surrounding Adobe Inc. (NASDAQ:ADBE) remains cautiously constructive. Roughly 60% of analysts maintain their bullish tones with a consensus price target of $417.50, implying 37.30% upside. However, investor debate is growing around the company’s short-term catalysts and longer-term franchise strength.
One recent analyst update came from Oppenheimer on January 13, 2026, when the investment firm downgraded Adobe Inc. (NASDAQ:ADBE) from ‘Outperform’ to ‘Perform’ without assigning a price target. The firm’s neutral stance comes amid broader sector uncertainty.
On January 9, 2026, BMO Capital downgraded Adobe Inc. (NASDAQ:ADBE) to ‘Market Perform’, cutting its price target from $400.00 to $375.00, reflecting rising competition within Creative Cloud, particularly among small businesses, students, and freelancers. While the firm views Adobe as a cheaply valued stock, BMO Capital sees limited upside catalysts at the moment and expects shares to remain range-bound.
Furthermore, on January 5, 2026, Jefferies downgraded Adobe Inc. (NASDAQ:ADBE) from ‘Buy’ to ‘Hold’, reducing its price target from $500.00 to $400.00. The firm’s update came as part of a broader 2026 software reset. The firm noted relative strength in the infrastructure over the applications segment amid gradual AI monetization.
Adobe Inc. (NASDAQ:ADBE), a global software leader, provides digital media and digital experience solutions. Through its offerings, the company enables content creation, document management, and customer experience optimization for creative professionals, enterprises, and marketers worldwide.
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