Stock Market

22 Best Stocks to Buy As Markets Rally: Goldman Sachs


New year, same market.

Investors hoping for new leadership in the stock market have been sorely disappointed, as 2023’s top performers have generally enjoyed encores early in the year.

“One of the messages from January market activity has been ‘what worked for 2023 is still working in 2024,'” wrote Goldman Sachs researcher Steven Kron in a February 1 note. “A brief scan of the stocks within the S&P 500 finds that the vast majority of them traded in the same direction for January as they have for the past 12 months.”

Reasons for optimism abound

US stocks are trading near record highs, as are mega-cap technology companies like Nvidia, Microsoft, and Meta. That’s no coincidence, as the handful of growth-oriented firms in the so-called Magnificent Seven disproportionately drove gains last year.

Excitement about artificial intelligence may be bordering on euphoria, but Goldman Sachs believes much of the optimism about the transformative technology is warranted.

“The potential of AI and a burgeoning positive inflection in corporate demand for software and compute power are fueling the hyper-scalers and the facilitators of technology,” Kron wrote.

Better-than-feared economic growth is also a tailwind for stocks. Economists at Goldman Sachs boosted their US GDP growth projection from 2% to 2.4% in January since consumers and the government are spending more than expected. An improving housing market is also a catalyst.

And although manufacturing activity is still in contractionary territory despite steadily improving, Goldman noted that some caution will prevent investors from getting overly exuberant during the continued expansion. Plus, manufacturing data was lukewarm during an otherwise strong 2023.

A normalizing economic environment will allow the Federal Reserve to lower interest rates throughout the year, according to Goldman Sachs. That would relieve pressure on consumers and businesses while boosting stock valuations in a win-win for markets.

Perhaps the most serious concerns in 2024 are centered on politics and geopolitics. Conflicts in the Middle East and Russia are worth monitoring closely, Kron wrote, as is their effect on commodity prices, which have stayed surprisingly low lately.

22 stocks to buy now

Besides sharing its latest market commentary, Goldman Sachs unveiled its conviction list of companies it’s most confident in now.

Below are those 22 stocks, along with the ticker, market capitalization, sector, price target, percent upside to that target, the percentage of Wall Street analysts with buy ratings, and one-sentence investment thesis for each.



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