On January 21, Morgan Stanley chairman and CEO Ted Pick joined CNBC’s ‘Squawk Box’ to discuss the latest market trends and suggested that the corporate health of large cap companies is excellent. Pick described the current investment banking environment as excellent and noted that it is as strong as it has been in a long time. He explained that the M&A activity, which was previously stalled by the pandemic and rising interest rates, is now surging in the large-cap space. This resurgence is fueled by the reality of AI, as companies seek to diffuse costs through scale, alongside a significant increase in cross-border activity and IPO volume. Pick highlighted that growth companies with real capitalization are no longer content to stay private and are moving toward public markets.
Pick offered an optimistic outlook for 2026, supported by strong corporate and high-end consumer health. While the long-term average for earnings growth is typically around 7 or 8 percent, he mentioned that Morgan Stanley’s Mike Wilson (Chief US Equity Strategist and CIO) is forecasting growth of 15 to 17 percent for the year. He noted that the Fed has eased rates three times and that inflation is coming down. Despite high asset prices and global political swirl, Pick characterized the current situation as having green lights across the board. Furthermore, he expressed excitement about the long-term potential for AI to save costs and boost productivity.
That being said, we’re here with a list of the 15 most undervalued large cap stocks to invest in now.
Our Methodology
We sifted through the Finviz stock screener to compile a list of stocks that were trading between $10 billion and $200 billion, and also had a forward P/E ratio under 15. We then selected 15 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 29.
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).
15 Most Undervalued Large Cap Stocks to Invest In Now
15. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 71
General Motors Company (NYSE:GM) is one of the most undervalued large cap stocks to invest in now. On January 28, following a strong Q4 2025 earnings beat, RBC Capital increased its price target for General Motors from $92 to $107 with an Outperform rating. The firm suggested that GM is well-equipped to counter commodity and onshoring pressures through a combination of regulatory tailwinds, improved warranty costs, and narrowing EV losses, alongside potential benefits from USMCA tariff negotiations.
Furthermore, the firm highlighted General Motors’ strategic agility and noted that the company is effectively navigating the current EV slowdown while retaining the production flexibility necessary to scale up rapidly should demand recover.
On the same day, Morgan Stanley also raised the price target for General Motors Company (NYSE:GM) to $100 from $90, while maintaining an Overweight rating. This announcement was also made following a robust earnings report and 2026 guidance that surpassed consensus expectations. The firm noted that while the initial guidance is strong, there remains significant potential for upward revisions as the year progresses. Additionally, Morgan Stanley highlighted General Motors’ continued commitment to shareholder value, specifically pointing to the company’s newly authorized $6 billion share buyback program as a key driver for investor confidence.
General Motors Company (NYSE:GM) designs, builds, and sells trucks, crossovers, cars, and automobile parts worldwide. It operates through GM North America, GM International, and GM Financial segments.
14. Centene Corporation (NYSE:CNC)
Number of Hedge Fund Holders: 72
Centene Corporation (NYSE:CNC) is one of the most undervalued large cap stocks to invest in now. On January 9, Mizuho increased its price target for Centene from $40 to $47 while maintaining a Neutral rating. This sentiment was posted as part of the firm’s broader Q4 2025 preview for the healthcare facilities and managed care sector. The firm’s recent physician survey suggested that healthcare utilization growth decelerated sequentially, even when accounting for easier year-over-year comparisons. This cooling growth may indicate that the utilization trend is currently peaking, providing a cautious backdrop for the firm’s updated valuation.
On January 7, Wells Fargo increased its price target for Centene to $43 from $35 with an Equal Weight rating while expressing a preference for Medicare Advantage within the managed care sector. The firm noted high uncertainty regarding Medicaid and Exchanges and warned of a more challenging environment for hospitals in 2026 as post-COVID tailwinds diminish and legislative risks increase.
A day before that, Bernstein analyst Lance Wilkes also raised the firm’s price target for Centene to $59 from $45 with an Outperform rating based on the expectation of a sector-wide turnaround in government managed care starting in 2026. While the firm anticipates a non-linear recovery with some potential volatility, it views current levels across all managed care organization sectors as attractive entry points for investors.
Centene Corporation (NYSE:CNC) operates as a healthcare enterprise that provides programs and services to under-insured and uninsured families and commercial organizations in the US. The company operates through four segments: Medicaid, Medicare, Commercial, and Other.
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