In this article, we discuss the 11 Most Undervalued Blue Chip Stocks to Buy Now.
As we enter 2026, U.S. equities are expected to enter a phase marked by several complexities following the outsized gains in 2025. According to Reuters, 2026 offers a landscape shaped by geopolitics, domestic politics, and shifting monetary policy. At the same time, investors appear more cautious about risks that may be erupting outside the obvious hotspots.
The market is eying central bank independence amid the much-anticipated nomination of a new Federal Reserve chair in early January, as Jerome Powell’s term ends in May. The focus heightens as President Donald Trump pressures the Fed to cut rates. Meanwhile, analysts caution that excessive easing could worsen inflation and lead to a disruptive policy reversal later.
Furthermore, uncertainty about the policy outlook is heightened by the U.S. midterm elections in November and by pending Supreme Court rulings on emergency tariffs. Additionally, geopolitical tensions, especially after U.S. actions in Venezuela, are adding to broader risk assessments.
Amid this macroeconomic environment, U.S. equities are projected to rise in 2026, albeit at a slower pace. According to a Reuters poll, respondents expect a higher chance of a correction if highly valued AI-driven stocks come under pressure. With bond yields and debt levels expected to remain elevated and investors looking beyond large tech plays, companies with stable, durable earnings and relative value are coming into focus, leading us to our list of undervalued blue-chip stocks.
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Our Methodology
To curate our list of the most undervalued blue chip stocks to buy now, we screened large-cap stocks with a market capitalization of over $100 billion. From this initial list, we filtered out stocks with positive analyst sentiment, solid financials, and sound balance sheets. Next, we selected stocks from this list that are trading at least 25% below the S&P 500’s forward price-to-earnings of 22.1x as of January 7, 2026. Finally, we incorporated each stock’s upside potential based on Wall Street consensus as of January 6, 2026, market close, and ranked them accordingly. We also considered hedge fund sentiment surrounding each stock, using Insider Monkey’s hedge fund database, which tracks 978 stocks as of Q3 2025.
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11. Gilead Sciences, Inc. (NASDAQ:GILD)
Forward Price-to-Earnings Multiple: 13.81
Upside Potential: 11.20%
Number of Hedge Fund Holders: 61
Gilead Sciences, Inc. (NASDAQ:GILD) is one of the most undervalued blue chip stocks to buy now.
On January 7, 2026, reports highlighted that analysts are increasingly confident in Gilead Sciences, Inc. (NASDAQ:GILD)’s short- and medium-term outlook, driven by optimism around the company’s HIV franchise. On that day, UBS analyst Michael Yee upgraded the stock from ‘Neutral’ to ‘Buy’ and raised the firm’s price target from $112 to $145, according to The Fly. The analyst expects strong HIV pre-exposure prophylaxis sales from Yeztugo, which could potentially boost both revenue and earnings. At the same time, the analyst expects visibility into the company’s outer-year growth trajectory to improve. Furthermore, Yee highlighted the company’s focus on prevention-based HIV therapies, which reflects a strategic evolution of the company’s core antiviral business toward more durable, growth-oriented demand drivers.
This positive update was accompanied by another on the same day, with Citi’s analyst Geoff Meacham raising the firm’s target from $135 to $140 and maintaining a ‘Buy’ rating.
The bullish analyst sentiment was reinforced earlier, on December 22, 2025, when Gilead Sciences, Inc. (NASDAQ:GILD) exercised its option to exclusively license Assembly Biosciences’ long-acting HSV helicase-primase inhibitor programs, ABI-1179 and ABI-5366. The deal, supported by positive Phase 1b data and once-weekly oral dosing potential, extends the company’s goal of expanding its antiviral pipeline into areas with significant unmet need and limited competition. This move supports the company’s long-term growth optionality beyond HIV.
Gilead Sciences, Inc. (NASDAQ:GILD), a biopharmaceutical company, focuses on the development and commercialization of innovative medicines across HIV, liver disease, oncology, hematology, and inflammatory conditions.
10. Shell plc (NYSE:SHEL)
Forward Price-to-Earnings Multiple: 11.07
Upside Potential: 11.80%
Number of Hedge Fund Holders: 48
Shell plc (NYSE:SHEL) is included in our list of the most undervalued blue chip stocks to buy now.
On January 7, 2026, TheFly reported that Morgan Stanley reduced its price target on Shell plc (NYSE:SHEL) from 3,007 GBp to 2,811 GBp while maintaining an ‘Overweight’ rating. This update follows the company’s recent strategic growth wins.
On January 7, 2026, Reuters reported that state-owned Petrovietnam Gas awarded its first-ever term LNG supply tender to Shell plc (NYSE:SHEL). This development marks a key milestone in Vietnam’s gas market evolution. According to the five-year agreement, Shell will be supplying roughly 400,000 metric tons of LNG annually from 2027 to 2031 on a delivered ex-ship basis to the Thi Vai terminal. With the country starting to import LNG only in 2023 and having relied exclusively on the spot market so far, the deal marks a structural shift toward long-term supply security.
Furthermore, the company’s long-term production outlook was reinforced by Reuters on January 6, 2026, which reported that Shell plc (NYSE:SHEL) agreed to acquire a 35% stake in offshore Blocks 49 and 50 in Angola from Chevron. This move reinforces the company’s established goal of sustaining oil output into the 2030s, alongside growing gas production by 1% through 2030.
Shell plc (NYSE:SHEL), a global energy company, produces oil and natural gas. Its operations span LNG, upstream exploration, refining, chemicals, marketing, and the growth of renewables and energy solutions businesses worldwide.
9. Verizon Communications Inc. (NYSE:VZ)
Forward Price-to-Earnings Multiple: 8.41
Upside Potential: 15.40%
Number of Hedge Fund Holders: 60
Verizon Communications Inc. (NYSE:VZ) is one of the most undervalued blue chip stocks to buy now.
As of January 7, 2026, roughly 40% of analysts covering Verizon Communications Inc. (NYSE:VZ) are bullish. The consensus price target is $46.50, representing a 15.40% upside. However, the analyst confidence appears to be growing with the company’s network-led strategy translating into steadier growth and defensible cash flows.
On December 18, 2025, Verizon Communications Inc. (NYSE:VZ) finalized a commercial agreement with Kodiak AI to deliver 5G, LTE, and IoT connectivity for Kodiak’s autonomous trucking platform. With this move, Verizon puts its fast, reliable networks and ThingSpace IoT platform at the core of Kodiak’s mission-critical AI-driven logistics operations. The company will enable Kodiak’s trucks to operate with assisted autonomy and will allow managers to monitor and control the fleet in real time. Verizon aims to integrate its network into emerging, high-value enterprise use cases.
At the same time, Verizon Communications Inc. (NYSE:VZ) was revisited by Raymond James two days earlier, according to TheFly. The investment firm reiterated its ‘Outperform’ rating with a $47 price target. The firm’s bullish stance reflects the company’s dividend appeal and potential subscriber growth. On the same day, Verizon Communications Inc. (NYSE:VZ) partnered with Array Digital Infrastructure in a multi-year deal. The partnership gave Verizon access to roughly 4,400 U.S. towers, improving coverage, deployment speed, and long-term cost efficiency.
Verizon Communications Inc. (NYSE:VZ), a leading U.S. telecommunications company, provides 5G and 4G wireless, fiber, and fixed wireless broadband, and advanced enterprise technology solutions built on nationwide network infrastructure.
8. Anheuser-Busch InBev SA/NV (NYSE:BUD)
Forward Price-to-Earnings Multiple: 15.13
Upside Potential: 17.60%
Number of Hedge Fund Holders: 24
Anheuser-Busch InBev SA/NV (NYSE:BUD) is included in our list of the most undervalued blue chip stocks to buy now.
As of January 7, 2026, roughly 90% of covering analysts keep a bullish stance on Anheuser-Busch InBev SA/NV (NYSE:BUD). The consensus price target is $75.00, which implies 17.60% upside.
The analysts’ confidence was recently supported by the company’s operational moves reported by Reuters on January 6, 2026. Firstly, it was reported that Anheuser-Busch InBev SA/NV (NYSE:BUD) will invest $30 million in its Jacksonville, Florida, brewery and a can plant under its Brewing Futures initiative. With this investment, the company plans to expand capacity for fast-growing brands such as Michelob Ultra, including upgrades to bottling lines and brewing tanks. Michelob Ultra is the company’s leading brand by volume in 2025, reflecting a portfolio shift toward premium light beers with resilient demand. This investment follows the company’s $300 million investment in U.S. facilities last year and more than $100 million in Jacksonville since 2021.
Secondly, Reuters reported on the same day that Anheuser-Busch InBev SA/NV (NYSE:BUD) will reacquire a 49.9% stake in its U.S. container plants for roughly $3 billion. With this repurchase, the company will regain full economic exposure to seven plants across six states. The deal, funded with cash, is expected to close in Q1 and is expected to boost profits from year one, enhance supply security, and mitigate rising aluminum costs. This is the company’s first major acquisition after reducing leverage to investor-acceptable levels at the end of 2024.
Anheuser-Busch InBev SA/NV (NYSE:BUD), the world’s largest brewer, produces and distributes alcoholic and non-alcoholic beverages across the globe.
7. CVS Health Corporation (NYSE:CVS)
Forward Price-to-Earnings Multiple: 11.26
Upside Potential: 17.70%
Number of Hedge Fund Holders: 78
CVS Health Corporation (NYSE:CVS) is one of the most undervalued blue chip stocks to buy now.
On January 6, 2026, Bernstein increased its price target on CVS Health Corporation (NYSE:CVS) from $87 to $91, while reiterating a ‘Market Perform’ rating. The investment firm expects a broader inflection in the government-managed care organization (MCO) sector beginning in 2026. The firm projects short-term earnings recovery, driven by Medicare Advantage (MA) and compelling valuations offered by Medicaid, despite an uneven recovery path. Amid this outlook, CVS appears well-positioned to be a key beneficiary of this shift, thanks to its diversified exposure across MA, Medicaid, and services.
Reinforcing that constructive stance, on January 7, 2026. Cantor Fitzgerald named CVS Health Corporation (NYSE:CVS) as one of its preferred MA exposure plays for this year. The firm’s optimism reflects a more favorable regulatory backdrop. Cantor Fitzgerald sees increased earnings visibility due to upcoming sector catalysts, including CMS enrollment data in mid-February and the preliminary MA rate notice in late January or early February 2026.
On the other hand, analysts from Wells Fargo recently projected declining post-pandemic tailwinds and subsidy risks. As a result, the firm downgraded CVS’s peers Humana and Universal Health Services. At the same time, the firm named CVS and UnitedHealth as two companies that are likely to benefit from the MA recovery.
CVS Health Corporation (NYSE:CVS), a diversified healthcare solutions provider, spans insurance benefits, pharmacy benefit management, retail pharmacy, clinics, and consumer wellness, integrating care delivery, services, and coverage at scale.
6. PepsiCo, Inc. (NASDAQ:PEP)
Forward Price-to-Earnings Multiple: 16.23
Upside Potential: 18.00%
Number of Hedge Fund Holders: 68
PepsiCo, Inc. (NASDAQ:PEP) is included in our list of the most undervalued blue chip stocks to buy now.
On December 17, 2025, PepsiCo, Inc. (NASDAQ:PEP) saw Citi raise its price target on its stock from $165 to $170, while reiterating a ‘Buy’ rating. The update came as part of the firm’s 2026 sector outlook. While expressing moderate enthusiasm for non-alcoholic beverages more broadly, the firm highlighted an improvement in the stock’s fundamentals, driven by inventory destocking cycles and easing consumption comparisons. Benefiting from these conditions, the firm believes the company is well-positioned to translate its efficiency gains into steadier earnings momentum. At the same time, the analyst’s optimism is reinforced by the company’s ongoing operational transformation.
On January 6, 2026, PepsiCo, Inc. (NASDAQ:PEP) announced its multi-year, industry-first collaboration with Siemens and Nvidia. The move was first announced at CES 2026. The partnership aims to digitize and re-engineer the company’s global manufacturing and supply chain footprint using AI-driven, physics-based digital twins. Furthermore, the move supports the company’s shift toward a digital-first planning model, which will allow plants and warehouses to be virtually simulated, stress-tested, and optimized before any physical build. Looking ahead, the company appears well-positioned to operate on a lower-cost growth path, execute faster capacity scaling, and see improved returns on invested capital amid rising demand for production and distribution capacity.
PepsiCo, Inc. (NASDAQ: PEP), a global food and beverage leader, operates in snacks and drinks across diversified regional segments.
5. The Progressive Corporation (NYSE:PGR)
Forward Price-to-Earnings Multiple: 13.28
Upside Potential: 18.90%
Number of Hedge Fund Holders: 84
The Progressive Corporation (NYSE:PGR) is one of the most undervalued blue chip stocks to buy now.
On January 7, 2026, Evercore ISI reduced its price target on The Progressive Corporation (NYSE:PGR) from $250 to $237, while reiterating an ‘In Line’ rating. TheFly reported that the firm describes 2026 as a challenging year for the property and casualty (P&C) insurance sector. Citing a tougher cyclical backdrop, the firm noted slowing industry fundamentals, which are setting up a “stock picker’s market.” In such an environment, the firm believes valuation discipline and underwriting execution will increasingly differentiate outcomes.
A similar analyst tone was reported on January 7, 2026. JPMorgan reduced its price target on The Progressive Corporation (NYSE:PGR) from $303 to $275, while maintaining an ‘Overweight’ rating, TheFly reported. While acknowledging worsening operating conditions in the sector, the firm argued that investors have already incorporated headwinds related to pricing, margin, and growth. At the same time, JPMorgan suggested that high-quality operators like Progressive may not fall much further.
According to TheFly, BofA also reduced its price target on The Progressive Corporation (NYSE:PGR) on January 5 to $328, while reiterating its ‘Buy’ rating. The firm attributed the reduction in the price target to unfavorable pricing trends across most P&C products, projecting loss costs to rise faster than prices as personal auto rates flatten.
The Progressive Corporation (NYSE:PGR), a leading U.S. P&C insurer, focuses on personal and commercial auto and residential property coverage. It operates through diversified personal, commercial, and property insurance segments.
4. PDD Holdings Inc. (NASDAQ:PDD)
Forward Price-to-Earnings Multiple: 9.55
Upside Potential: 19.90%
Number of Hedge Fund Holders: 73
PDD Holdings Inc. (NASDAQ:PDD) is included in our list of the most undervalued blue chip stocks to buy now.
On January 6, 2026, PDD Holdings Inc. (NASDAQ:PDD) saw Freedom Finance’s analyst Roman Lukianchikov raise the firm’s price target from $140 to $170, while reiterating a ‘Buy’ rating. The firm’s update follows the company’s mixed quarterly results announced in late November. The company’s operational resilience amid tighter U.S. trade dynamics was noted by the analyst, alongside the company’s ability to find its way through U.S. tariffs and the removal of the de minimis duty-free threshold for China-origin shipments. The firm’s confidence in PDD’s long-term strategy remains despite expectations that margin pressure will likely persist due to elevated investment levels. Lukianchikov noted that the company’s growth outlook remains largely dependent on its execution across both China and U.S. operations, with contributions from new international markets expected to gradually scale.
This analyst optimism was preceded by governance moves announced earlier. On December 19, 2025, Reuters reported that PDD Holdings Inc. (NASDAQ:PDD) made changes to its board, appointing co-CEO Jiazhen Zhao as co-chairman of the board, alongside CEO Lei Chen. It also named new senior leaders in engineering and finance. As Chinese e-commerce companies rapidly increase price competition amid soft consumer demand, this move reflects the company’s emphasis on execution and organizational depth during a margin-sensitive period.
PDD Holdings Inc. (NASDAQ:PDD) is a global commerce group that offers digital marketplaces and commerce platforms.
3. Sanofi (NASDAQ:SNY)
Forward Price-to-Earnings Multiple: 9.78
Upside Potential: 21.60%
Number of Hedge Fund Holders: 32
Sanofi (NASDAQ:SNY) is one of the most undervalued blue chip stocks to buy now.
On January 6, 2026, Barclays downgraded Sanofi (NASDAQ:SNY) from ‘Overweight’ to ‘Equal Weight’, while setting an EUR 85 price target. The firm’s update reflects its more cautious long-term outlook on the company despite the strong operational outlook and an undemanding valuation. Barclays recommends caution due to concerns around limited late-stage pipeline depth and the approaching loss of exclusivity for Dupixent. The bank sees the loss as a growing overhang on the company’s medium- to long-term growth profile despite solid near-term execution expectations.
Meanwhile, Sanofi (NASDAQ:SNY) reported a regulatory win on January 5, 2025, when the FDA accepted the supplemental BLA for Tzield for priority review to further its use in children as young as one year old with stage 2 type 1 diabetes. The filing, supported by interim Phase 4 PETITE-T1D data, reflects the company’s ability to extend lifecycle value from its existing assets. The FDA decision is expected to come out by April 29, 2026.
At the same time, on December 30, 2025, TD Cowen cited pipeline risk, while reiterating a ‘Hold’ rating following a Complete Response Letter for tolebrutinib. The firm expects long-term sales to decline sharply despite diversification from the Dynavax acquisition.
Sanofi (NASDAQ:SNY), a global biopharmaceutical company, focuses on specialty care, vaccines, and general medicines. It combines research and development with global commercial scale across diversified therapeutic franchises.
2. AT&T Inc. (NYSE:T)
Forward Price-to-Earnings Multiple: 11.19
Upside Potential: 23.30%
Number of Hedge Fund Holders: 84
AT&T Inc. (NYSE:T) is included in our list of the most undervalued blue chip stocks to buy now.
On January 7, 2026, AT&T Inc. (NYSE:T) saw Scotiabank analyst Maher Yaghi reduce its price target on the stock from $30.25 to $29.50, while reiterating a ‘Sector Perform’ rating ahead of Q4 results. TheFly reported that the analyst expects revenue and EBITDA growth in the sector to remain positive despite elevated wireless promotional intensity during the holiday season. Accordingly, the firm signals a stable short-term outlook for its core operations.
Meanwhile, AT&T Inc. (NYSE:T) continues to enhance its service portfolio against peers such as T-Mobile and Starlink, announcing a partnership with American Airlines on January 6, 2026. The company will provide free in-flight Wi-Fi to loyalty program members, rolling it out on nearly all flights by early spring. With this initiative, the company remains strategically positioned in the growing in-flight connectivity market, with the move offering potential incremental revenue streams.
Moreover, the FCC approved the company’s $1.02 billion acquisition of UScellular spectrum licenses on December 4, 2025. This development strengthens the company’s network coverage, capacity, and performance. Additionally, the move bolsters AT&T Inc.’s (NYSE:T) long-term competitive positioning, enhancing service quality and supporting growth across wireless and broadband segments.
AT&T Inc. (NYSE:T) offers telecom and technology services across the U.S. and Latin America, including wireless, wireline, and broadband offerings for consumers and businesses.
1. Adobe Inc. (NASDAQ:ADBE)
Forward Price-to-Earnings Multiple: 14.27
Upside Potential: 25.70%
Number of Hedge Fund Holders: 88
Adobe Inc. (NASDAQ:ADBE) is one of the most undervalued blue chip stocks to buy now.
On January 5, 2026, TheFly reported that Jefferies downgraded Adobe Inc. (NASDAQ:ADBE) from ‘Buy’ to ‘Hold’, while reducing its price target from $500 to $400. The update comes as part of the firm’s 2026 software sector “playbook.” The firm sees increasing competitive pressure in the lower-end segment. The segment is marked by users who have access to several AI-enhanced alternatives to Creative Cloud. Despite intensifying competition, the firm describes Adobe Inc. (NASDAQ:ADBE) as well-protected among creative professionals and power users who leverage the company’s advanced features. While the investment firm projects high single-digit revenue growth, it doubts that the company could hit low- to mid-teens acceleration without a step-function increase in creative AI mindshare. Thus, Jefferies emphasized the need for stronger AI positioning.
Additionally, the firm sees 2026 as another year of gradual AI monetization. It expects overall growth in applications to fall behind other segments, such as semiconductors. As a result, Jefferies inclines toward infrastructure over applications in the first half of the year. However, it expects negative sentiment toward applications to improve in the back half.
Adobe Inc. (NASDAQ:ADBE) delivers digital marketing and media solutions. It has offerings in creative content, customer experience management, publishing, and advertising.
While we acknowledge the potential of ADBE to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ADBE and that has 100x upside potential, check out our report about this cheapest AI stock.
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