In this article, we will look at the 13 Most Undervalued S&P 500 Stocks to Invest In.
Investors hunting for value in the S&P 500 are facing a market where lofty valuations and concentrated gains have steadily pushed many stocks outside traditional “value” territory. That backdrop has some of Wall Street’s largest asset managers warning that valuation discipline matters more than ever before.
J.P. Morgan Asset Management makes the long-horizon case for why that matters. In its 2026 Long-Term Capital Market Assumptions report, the firm notes that “the starting point for valuations has an impact on long-term returns,” a reminder that long-horizon outcomes are heavily influenced by entry price.
Meanwhile, Fidelity’s 2026 stock market outlook highlights that “rising earnings have been driving returns in 2025, after years of gains driven mainly by rising valuations such as price-earnings ratios.” Fidelity warns that while the broad bull market remains intact, concentration among a handful of mega-cap names and generally high valuations could leave stocks vulnerable if earnings disappoint.
Taken together, these institutional views suggest that in a market where valuation has been elevated, and earnings remain the key engine of gains, identifying large-cap stocks trading below traditional valuation thresholds could offer both margin of safety and attractive long-run potential. With this in mind, we’ll look at the 13 Most Undervalued S&P 500 Stocks to Invest In.
Our Methodology
To identify the 13 Most Undervalued S&P 500 Stocks to Invest In, we used the Finviz screener to generate a list of S&P 500 stocks that are trading below a forward P/E of 15x. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds.
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).
13. The AES Corporation (NYSE:AES)
On February 27, 2026, Seaport Research analyst Angie Storozynski upgraded The AES Corporation (NYSE:AES) to Neutral from Sell.
On February 20, 2026, Morgan Stanley lowered its price target on AES Corp. to $23 from $24 and maintained an Overweight rating. The firm updated price targets for its North American Regulated & Diversified Utilities and IPPs coverage for January. Morgan Stanley noted that utilities underperformed the S&P this month. Previewing Q4 earnings, the firm expects “some balance” in discussions around data center pipelines given affordability and political concerns.
Earlier in February, Barclays downgraded AES Corp. to Equal Weight from Overweight with an unchanged $15 price target. The firm said the shares are trading closer to fundamental value. The “bull case” now appears less likely, and risk/reward is more balanced following the share price rally.
Jefferies raised its price target on AES Corp. to $16 from $13 and kept a Hold rating. The firm said headlines about a possible GIP-EQT bid are “credible,” noting GIP’s history with AES and prior consideration as a buyer. Jefferies added that clean energy comparables trading higher makes valuation easier to justify.
The AES Corporation (NYSE:AES), together with its subsidiaries, operates as a power generation and utility company in the United States and internationally.
12. GoDaddy Inc. (NYSE:GDDY)
On February 26, 2026, Evercore ISI lowered its price target on GoDaddy Inc. (NYSE:GDDY) to $95 from $145 and maintained an In Line rating. The same day, Citi reduced its price target to $110 from $195 and kept a Buy rating. Citi said 2026 revenue guidance missed expectations but expressed encouragement around GoDaddy’s newer “agentic offerings.” The firm sees potential upside to 2026 and 2027 estimates.
On February 25, 2026, Cantor Fitzgerald lowered its price target on GoDaddy to $90 from $130 and maintained a Neutral rating. The firm said Q4 revenue met expectations. Bookings growth slowed to 5% year over year due to a new go-to-market strategy and one-year domain promotions. Cantor noted Q1 and FY26 revenue growth guidance of 6% year over year was slightly below prior Street estimates. Bookings are expected to decelerate in Q1 before normalizing in the second half. The firm added that ongoing AI initiatives and efficiency programs support long-term growth, though near-term AI-related sentiment may pressure multiples.
On February 24, 2026, GoDaddy reported Q4 EPS of $1.80 versus consensus of $1.59. Q4 revenue was $1.27 billion, in line with the consensus of $1.27 billion. The company guided FY26 revenue to $5.195 billion to $5.275 billion, compared to the consensus of $5.28 billion.
GoDaddy Inc. (NYSE:GDDY) designs and develops cloud-based products in the United States and internationally.
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