In this article, we explore the Goldman Sachs Penny Stocks: Top 12 Stock Picks.
The rotation towards small and micro-cap stocks is gaining momentum. While large caps and growth stocks have dominated performance in recent years, concerns about a potential correction are prompting investors to take a closer look at much smaller plays.
The S&P SmallCap 600 index, which measures the performance of the small-cap segment of the US equity market, is already up by more than 6% for the year. The iShares Micro Cap ETF is also up by about 8% over the same period. In contrast, the broader S&P 500 is up by 0.35% over the same period. The underperformance comes as investors pay close attention to valuations, opting to settle on stocks trading below their historical norms and at discounted valuations.
According to Wealth Alliance managing director Eric Diton, small stocks have been crushed by large stocks in recent years. However, earnings growth momentum amid an accommodative monetary policy environment should trigger a rotation.
“We’re expecting some big small-cap earnings this year and next. We’re overdue for some big small-cap outperformance, Diton said in an interview with Reuters.
The expectation of additional interest rate cuts affirms the case for penny and small-cap stocks.
Morningstar Chief US Market Strategist Dave Sekera explained last week: “According to our valuations, we think they have further to run. Looking forward, our economics team forecasts at least two more cuts to the fed-funds rate this year and long-term interest rates to fall further. Plus, the AI build out boom has spurred faster-than-expected economic growth. Historically, small-cap stocks perform best when the Fed is easing monetary policy, long-term interest rates are declining, and the rate of economic growth is reaccelerating.”
Goldman Sachs is one investment bank that maintains significant exposure to penny stocks as part of its diversification strategy. According to the investment bank, the baseline macro outlook is supportive of small-cap upside in 2026.
“We do not believe markets are fully pricing the likely strength of the US economy next year, and small-caps typically outperform during cyclical rallies. Futures positions and short interest also suggest upside risk for small-cap stocks, according to the Goldman Sachs portfolio strategy research team in a research note.”
Our Methodology
To identify Goldman Sachs’ top 12 penny stock picks, we analyzed the investment bank’s equity holdings as of the third quarter of 2025. We focused on companies trading under $5 per share and examined their popularity among hedge funds. Finally, we ranked the list in ascending order based on Goldman Sachs stake in the companies.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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).
Grupo Televisa, S.A.B. (NYSE:TV) is one of Goldman Sachs’ top penny stock picks. On February 10, Benchmark reaffirmed its Buy rating and $10 price target for Grupo Televisa, S.A.B. (NYSE:TV) ahead of its earnings report. The company is set to release fourth-quarter 2025 results on February 19, with TelevisaUnivision’s joint venture results due a day earlier.
Benchmark expects results to be mostly in line with last year, possibly slightly down or flat, but remains optimistic about stronger performance in 2026. The firm pointed to Mexico’s stable exports, strong peso, and easing tariff concerns as supportive factors.
Looking ahead, the firm believes Mexico’s growing role in nearshoring, along with competitive manufacturing and transportation costs, could boost investor interest in Mexican equities next year.
The research firm maintains a positive outlook on the stock, impressed by operational progress around the company and its TelevisaUnivision joint venture. It also expects the company to benefit from and capitalize on Mexico’s favorable economic fundamentals, especially in export growth and peso stability. Mexican exports to the US have been rising as the country benefits from lower tariff rates than those on Chinese exports.
The company is already closing in on a deal to acquire AT&T’s Mexican unit through its telecoms arms. Media reports indicate negotiations are in the final stages. A deal will allow Grupo Televisa SA to merge AT&T Mexico’s 24 million mobile customers with its 20 million fixed customers served by Izzi.
“Grupo Televisa and the Cerberus fund are indeed participating in a purchase agreement with AT&T,” said a source close to the government. “They have spoken with several companies, and talks with AT&T are ongoing; it may or may not go through, anything is possible these days,” said another source closely following the case.
Grupo Televisa, S.A.B. (NYSE:TV) is the largest telecommunications and media corporation operating mainly in Mexico. It provides cable and broadband (Izzi), satellite TV (Sky), and owns a large stake in TelevisaUnivision, which distributes content globally.
AtaiBeckley Inc. (NASDAQ:ATAI) is one of Goldman Sachs’ top penny stock picks. On January 16 at the 64th Annual Meeting of the American College of Neuropsychopharmacology (ACNP), AtaiBeckley Inc. (NASDAQ:ATAI) delivered promising clinical data on BPL-003 for treatment-resistant depression.
The results affirmed the development of transformative mental health therapies. The Phase 2b study for BPL-003 affirmed significant and sustained antidepressant effects in the treatment of resistant depression. The results assert potential commercial viability. AtaiBeckley has already secured Breakthrough Therapy designation for BPL-003 from the Food and Drug Administration.
Dr Kevin Craig, Chief Medical Officer at AtaiBeckley, said, “We are delighted that our Phase 2b BPL-003 results were not only selected for poster presentation but also recognized as a Hot Topic, one of the most competitive and prestigious categories at ACNP. This distinction underscores the strength and impact of our clinical findings in treatment-resistant depression.
On January 20, Guggenheim initiated coverage of AtaiBeckley with a Buy rating and an $11 price target, calling it a standout in next-generation psychiatry. The firm said the merger with Beckley Psytech secures full ownership of its lead drug, BPL-003, which has delivered strong and lasting results in Phase IIb trials for treatment-resistant depression, positioning it well for broad clinical use and commercial growth.
Earlier, on January 13, analysts at Cantor Fitzgerald reiterated an Overweight rating on AtaiBeckley. The research firm remains optimistic that the candidate drug BPL-003 will become one of the key players in the psychedelic treatment landscape.
AtaiBeckley Inc. (NASDAQ:ATAI) is a clinical-stage biopharmaceutical company focused on developing innovative psychedelic-based and neuroplasticity-promoting treatments for mental health disorders, such as treatment-resistant depression and social anxiety.
When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.
Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.
At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.
Do the math. According to Musk, this technology could be worth $250 trillion by 2040.
Put another way, that’s roughly equal to:
175 Teslas
107 Amazons
140 Metas
84 Googles
65 Microsofts
And 55 Nvidias
And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.
It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.
Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.
How could anything be worth that much?
The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.
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In fact, Verge argues this company’s supercheap AI technology should concern rivals.
Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.
Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.
When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.
Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…
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