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.
13. HCA Healthcare Inc. (NYSE:HCA)
Number of Hedge Fund Holders: 73
HCA Healthcare Inc. (NYSE:HCA) is one of the most undervalued large cap stocks to invest in now. On January 28, RBC Capital raised its price target for HCA Healthcare to $555 from $525 while keeping an Outperform rating. This decision was made following the company’s strong Q4 2025 results and robust 2026 guidance. The firm expressed confidence in HCA Healthcare’s full-year outlook, which reflects better-than-expected core performance and $400 million in savings from strategic resiliency initiatives.
These internal efficiencies are expected to more than offset headwinds such as the expiration of the enhanced premium tax credits/ePTC and reduced contributions from state supplemental programs. Overall, RBC Capital remains encouraged by HCA Healthcare’s ability to use its scale and data-driven efficiencies to drive growth despite a shifting regulatory and payer landscape.
TD Cowen also increased its price target for HCA Healthcare Inc. (NYSE:HCA) on the same day from $490 to $529 with a Buy rating after the company’s Q4 2025 EBITDA exceeded consensus expectations. The firm attributed this performance largely to effective expense controls and updated its model to reflect a 2026 growth outlook that, while broad in range, remains positive. Despite the wide guidance, the firm noted that the projections surpassed the market’s cautious expectations, signaling resilience in the company’s operational model.
HCA Healthcare Inc. (NYSE:HCA), through its subsidiaries, owns and operates hospitals and related healthcare entities in the US. The company operates general and acute care hospitals that offer medical and surgical services.
12. Barrick Mining Corporation (NYSE:B)
Number of Hedge Fund Holders: 75
Barrick Mining Corporation (NYSE:B) is one of the most undervalued large cap stocks to invest in now. On January 29, JPMorgan initiated coverage of Barrick Mining with an Overweight rating and a $68 price target, underpinned by a bullish stance on gold driven by central bank demand and US policy uncertainty. The firm highlighted Barrick Mining’s world-class reserve base and strong organic growth potential in the near term as key advantages. Furthermore, the firm noted that the company’s stock is currently trading at a significantly larger discount relative to its global peers than historical norms, suggesting a compelling valuation opportunity for investors as the company will use its scale in a favorable precious metals environment.
On January 23, Canaccord raised the price target on Barrick Mining Corporation (NYSE:B) to C$80 from C$70 while maintaining a Buy rating on the shares.
Additionally, on January 19, Bank of America analyst Lawson Winder also raised the firm’s price target for Barrick Mining to $58 from $50 with a Buy rating as part of a broader upward revision for the North American precious metals sector. The firm noted that the macroeconomic factors driving gold prices have intensified, strengthening the case for higher valuations across the group. Additionally, BofA anticipates that Barrick Mining will deliver strong capital returns to shareholders in Q4.
Barrick Mining Corporation (NYSE:B) explores, develops, produces, and sells mineral properties. The company explores for gold, copper, silver, and energy materials.
11. Bristol Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 76
Bristol Myers Squibb Company (NYSE:BMY) is one of the most undervalued large cap stocks to invest in now. On January 28, Piper Sandler raised its price target for Bristol Myers to $66 from $62, keeping an Overweight rating. The firm noted that the stock remains undervalued, as current pricing largely accounts for the upcoming loss of exclusivity for Eliquis in the US while failing to reflect the improved visibility for a return to growth driven by steady pipeline progress.
A day before that, Citi analyst Geoff Meacham raised the firm’s price target on Bristol Myers to $60 from $53 with a Neutral rating as part of a Q4 2025 biopharma sector preview. Meacham suggested that beatable estimates and a reduction in policy risks have established a favorable setup for the group heading into 2026.
Earlier on January 13, Leerink analyst David Risinger raised the firm’s price target for Bristol Myers Squibb Company (NYSE:BMY) to $60 from $54 with an Outperform rating. The firm anticipates significant stock upside potential in 2026, driven by a robust pipeline that currently appears heavily discounted by the market. Following a company presentation on January 12, Leerink highlighted that Bristol Myers expects 12 registrational data readouts from eight distinct assets throughout 2026.
Bristol Myers Squibb Company (NYSE:BMY) discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It offers products for oncology, hematology, immunology, cardiovascular, neuroscience, and other areas.
10. Cheniere Energy Inc. (NYSE:LNG)
Number of Hedge Fund Holders: 76
Cheniere Energy Inc. (NYSE:LNG) is one of the most undervalued large cap stocks to invest in now. On January 28, RBC Capital lowered its price target for Cheniere Energy to $271 from $282 while maintaining an Outperform rating. This sentiment was announced as part of the firm’s Q4 2025 preview for the US Midstream sector.
The firm attributed its revised estimates primarily to the impact of commodity prices and production curtailments. RBC Capital also noted that while natural gas-focused stocks underperformed recently due to concerns over an AI bubble, the firm remains positive on the long-term natural gas growth story and expects it to be a prominent theme during the current earnings season.
Additionally, on January 25, Jefferies reduced its price target for Cheniere Energy Inc. (NYSE:LNG) to $251 from $290 while maintaining a Buy rating ahead of the company’s Q4 2025 earnings report. Although the firm acknowledged a universally bearish sentiment among investors regarding the outlook, it remains constructive on the stock despite anticipated volatility. The adjustment reflects expectations of lower long-term capacity and weaker marketing margins, yet Jefferies contends that Cheniere Energy’s low leverage and high contracting levels position it well to navigate current market conditions.
Cheniere Energy Inc. (NYSE:LNG) is an energy infrastructure company that primarily engages in the liquefied natural gas/LNG related businesses in the US.
9. CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 78
CVS Health Corporation (NYSE:CVS) is one of the most undervalued large cap stocks to invest in now. On January 28, Argus reduced its price target for CVS Health to $90 from $91 while maintaining a Buy rating. Despite a nearly 15% stock decline following the Centers for Medicare and Medicaid Services’ proposal for a flat 2027 Medicare Advantage reimbursement rate, the firm anticipates an upward revision before the final rate is set in April 2026. Argus suggested that even if the final increase falls short of the previous year’s 5.1%, CVS Health’s diversified business model should help mitigate the impact more effectively than its pure-play health insurance competitors.
Furthermore, on January 27, Bank of America also lowered its price target for CVS Health to $95 from $100 while maintaining a Buy rating following the release of the 2027 Medicare Advantage Advance Notice. The firm noted that the projected net all-in rate of 2.54% significantly trails market expectations of 4% to 6%, presenting a hurdle for the company’s margin expansion goals.
The firm estimates that if these rates are finalized without adjustments to benefits, CVS Health Corporation (NYSE:CVS) could face an unmitigated headwind exceeding $1 billion in Medicare Advantage revenue and margin. However, BofA remains optimistic, pointing out that final rates have historically improved upon the initial proposal in 64% of cases over the last 14 years.
CVS Health Corporation (NYSE:CVS) provides health solutions in the US. It operates through Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness segments.
8. Apollo Global Management Inc. (NYSE:APO)
Number of Hedge Fund Holders: 80
Apollo Global Management Inc. (NYSE:APO) is one of the most undervalued large cap stocks to invest in now. On January 13, UBS analyst Michael Brown reduced the firm’s price target on Apollo Global to $182 from $186, while maintaining a Buy rating on the shares.
On January 9, Barclays lowered its price target for Apollo Global to $168 from $172, maintaining an Overweight rating as part of a broader Q4 2025 outlook for the alternative asset management sector. The firm expects a significant, market-wide pickup in investment realizations. Additionally, the firm noted that current market concerns regarding credit performance are overblown, suggesting a positive fundamental view on the company’s credit exposure despite the slight price target adjustment.
Additionally, on January 7, Wolfe Research analyst Steven Chubak raised the firm’s price target on Apollo Global Management Inc. (NYSE:APO) to $166 from $165, while keeping an Outperform rating as part of a ‘Top 10 Themes for 2026’ report covering Banks, Brokers, and Alternative Managers. The firm identified Retail Brokers and Alternatives as its preferred subsectors entering 2026, positioning Apollo Global as a favored pick within that framework.
Apollo Global Management Inc. (NYSE:APO) is a private equity firm specializing in investments in credit, private equity, infrastructure, secondaries, and real estate markets. The firm prefers to invest in private and public markets.
7. Elevance Health Inc. (NYSE:ELV)
Number of Hedge Fund Holders: 82
Elevance Health Inc. (NYSE:ELV) is one of the most undervalued large cap stocks to invest in now. On January 30, Barclays lowered the firm’s price target on Elevance Health to $393 from $404 and kept an Overweight rating on the shares.
On January 29, Guggenheim analyst Jason Cassorla also lowered the firm’s price target on Elevance Health to $396 from $414 and maintained a Buy rating on recalibrated 2026 estimates following the company’s Q4 2025 report.
However, on the same day, Deutsche Bank raised the firm’s price target on Elevance Health Inc. (NYSE:ELV) to $332 from $320 while maintaining a Hold rating on the shares. This decision was made as the firm suggested that the company’s 2026 outlook may represent a floor.
Furthermore, UBS also lowered the firm’s price target on Elevance Health to $400 from $425 with a Buy rating.
Elevance Health Inc. (NYSE:ELV), together with its subsidiaries, operates as a health benefits company in the US. It has four segments: Health Benefits, CarelonRx, Carelon Services, and Corporate & Other.
6. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 84
Pfizer Inc. (NYSE:PFE) is one of the most undervalued large cap stocks to invest in now. On January 27, Cantor Fitzgerald raised the firm’s price target on Pfizer to $27 from $24 and maintained a Neutral rating on the shares. With 2026 guidance already established and only modest beat-and-raise potential anticipated, the firm expects a relatively quiet earnings call, shifting investor focus toward the timing and framing of VESPER-3 obesity data.
Additionally, Cantor Fitzgerald suggested that incremental updates regarding the Lyme disease vaccine, mevro for prostate cancer, and sigvotatug vedotin for non-small cell lung cancer will likely be more influential than the Q4 2025 results.
In other news, on January 10, Pfizer announced positive results from Cohort 3 of the pivotal Phase 3 BREAKWATER trial, evaluating BRAFTOVI (encorafenib) in combination with cetuximab and FOLFIRI for patients with previously untreated BRAF V600E-mutant metastatic colorectal cancer. The study showed a statistically significant and clinically meaningful confirmed objective response rate of 64.4% compared to 39.2% for patients receiving the standard-of-care FOLFIRI regimen. These findings suggest that the BRAFTOVI combination provides a durable response and potential flexibility in chemotherapy backbones for this aggressive cancer.
Pfizer Inc. (NYSE:PFE) discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products in the US and internationally. The company offers medicines and vaccines in various therapeutic areas.
5. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 84
AT&T Inc. (NYSE:T) is one of the most undervalued large cap stocks to invest in now. On January 26, Wells Fargo lowered the price target for AT&T to $27 from $29 while maintaining an Overweight rating. This sentiment was announced as part of the firm’s broader review of the wireless sector, where the firm noted that Q4 2025 fundamentals are expected to be stronger than anticipated, likely yielding upside in subscriber growth.
Despite this positive outlook on performance, Wells Fargo reduced price targets across the sector due to persistent concerns regarding increased competition, which the firm believes will continue to weigh on investor sentiment.
Earlier on January 13, Barclays reduced its price target for AT&T Inc. (NYSE:T) to $26 from $28 with an Equal Weight rating. The adjustment was part of a broader revision across the cable, satellite, and telecom services sector, reflecting the firm’s outlook for 2026. Barclays noted that 2026 could be a pivotal year for establishing a long-term operating roadmap for industry convergence, which may necessitate a shift in traditional capital allocation strategies across the sector.
AT&T Inc. (NYSE:T) provides telecommunications and technology services worldwide. The company operates through two segments: Communications and Latin America.
4. PayPal Holdings Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 86
PayPal Holdings Inc. (NASDAQ:PYPL) is one of the most undervalued large cap stocks to invest in now. On January 27, Cantor Fitzgerald analyst Ramsey El-Assal initiated coverage of PayPal with a Neutral rating and a $60 price target. El-Assal noted that the recent strategic initiatives have established a more balanced and profitable growth engine across the company’s Branded, PSP, and Venmo units, with momentum expected to drive further volume and revenue acceleration in FY2026 despite intense competitive pressures.
Additionally, earlier on January 20, Truist analyst Matthew Coad lowered the firm’s price target on PayPal Holdings Inc. (NASDAQ:PYPL) to $58 from $66, while maintaining a Sell rating. In a research note previewing Q4 earnings for the FinTech sector, the analyst anticipates solid results for the quarter but notes that difficult year-over-year comparisons could limit volume-related beats.
While Truist expressed long-term optimism for the sector through 2026, it warned that some management teams might issue conservative initial 2026 guidance to reset market expectations.
PayPal Holdings Inc. (NASDAQ:PYPL) operates a technology platform that enables digital payments for merchants and consumers worldwide. It operates a two-sided network at scale that connects merchants and consumers.
3. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 88
Adobe Inc. (NASDAQ:ADBE) is one of the most undervalued large cap stocks to invest in now. On January 14, Baird reduced its price target for Adobe to $350 from $410 while maintaining a Neutral rating on the shares.
A day before that, Oppenheimer downgraded Adobe from Outperform to Perform and noted that the expected AI-driven growth in the Digital Media business failed to materialize, leading to decelerating growth in FY2025. While the firm views Adobe as a cheap stock with good medium-term opportunities, it expects several factors to limit near-term upside and negatively impact sentiment in 2026. These headwinds include a challenging AI transition environment, uninspiring top-line growth, inconsistent product cycle execution, concerns regarding the company’s competitive moat, weak investor interest in software, and disappointing year-over-year operating margin guidance for FY2026.
On January 11, Goldman Sachs assumed coverage of Adobe Inc. (NASDAQ:ADBE) with a Sell rating and a $290 price target as part of a broader initiation of 12 software sector stocks. While the firm views AI adoption as a positive long-term tailwind for the software industry’s TAM over the next decade, the firm noted that Adobe’s high-end seat count is currently under pressure. This stems from value increasingly accruing at the lower end of the market, where Goldman Sachs believes Adobe has minimal exposure.
Adobe Inc. (NASDAQ:ADBE) operates as a technology company worldwide. The company has a strategic alliance with HUMAIN for the development of generative AI models and AI-powered applications.
2. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 107
The Walt Disney Company (NYSE:DIS) is one of the most undervalued large cap stocks to invest in now. On January 16, ahead of Disney’s FQ1 2026 earnings report, Citi lowered its price target on the shares to $140 from $145 while maintaining a Buy rating. The firm noted potential headwinds stemming from the Fubo acquisition but expects investor focus to remain on the growth trajectory of ESPN Unlimited.
On January 11, Phillip Securities initiated coverage of Disney with an Accumulate rating and a $130 price target, highlighting the company’s unrivalled IP as a key driver for strong consumer engagement across multiple platforms. The firm noted that Disney is well-positioned to monetize this IP ecosystem, which includes major franchises like Pixar, Marvel, and Star Wars, to support long-term revenue growth.
In other news, on December 11, it was reported that The Walt Disney Company (NYSE:DIS) is making a $1 billion equity investment in OpenAI as part of a landmark three-year partnership. This agreement establishes Disney as the first major content licensing partner for OpenAI’s Sora video generator, granting the platform access to over 200 characters from the Star Wars, Pixar, and Marvel franchises for user-prompted social videos starting in early 2026.
The Walt Disney Company (NYSE:DIS) operates as an entertainment company in the Americas, Europe, and the Asia Pacific. It operates in three segments: Entertainment, Sports, and Experiences.
1. Capital One Financial Corporation (NYSE:COF)
Number of Hedge Fund Holders: 129
Capital One Financial Corporation (NYSE:COF) is one of the most undervalued large cap stocks to invest in now. On January 26, Truist Securities lowered its price target for Capital One to $275 from $290 with a Buy rating. The firm modestly reduced its estimates following the bank’s Q4 2025 earnings report, citing pressure from higher expenses and dilution associated with the newly announced $5.15 billion acquisition of Brex. According to Truist, the central debate for investors is now whether the company’s expenses have reached a peak.
On the same day, following Capital One’s Q4 2025 report, Barclays lowered its price target on the shares to $287 from $294 while maintaining an Overweight rating. The firm viewed the announced acquisition of Brex as a positive move to expand the company’s product suite and commercial card presence. Additionally, the firm noted that Capital One’s credit quality continues to improve and highlighted an acceleration in capital returns during the quarter.
Furthermore, on January 23, Deutsche Bank lowered its price target for Capital One Financial Corporation (NYSE:COF) to $256 from $263 and maintains a Hold rating. The firm noted that the company’s Q4 2025 report signals the start of an investment cycle that creates uncertainty regarding Capital One’s earnings upside potential.
Capital One Financial Corporation (NYSE:COF) operates as the financial services holding company for the Capital One, National Association, which provides various financial products and services in the US, Canada, and the UK.
While we acknowledge the potential of COF 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 COF and that has 100x upside potential, check out our report about this cheapest AI stock.
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