28 stocks to buy for up to 162% earnings growth as markets surge another 10%: Goldman Sachs
- US stocks are clicking on all cylinders, which led Goldman Sachs to lift its S&P 500 target again.
- The top investment bank now expects the index to reach the 6,000 mark by year end.
A leading Wall Street firm by any measure can't seem to keep up with the S&P 500's surges.
Goldman Sachs just raised its target for the index for the fourth time in less than 12 months. The financial titan originally set its 2024 S&P 500 target at 4,700, then lifted it a month later to 5,100. By February, the firm had revised it higher to 5,200, before boosting it to 5,600 over the summer.
But the S&P 500 has kept hurdling over milestones, so Goldman Sachs is once again raising the bar. The firm now expects it to reach 6,000 by year-end and 6,300 in the next 12 months. Those targets represent 4.6% upside through year-end and nearly 10% in the coming year.
Stellar earnings growth inspired the change. David Kostin, Goldman's chief US equity strategist, wrote in his weekly note that he and his colleagues are calling for 8% profit growth this year. That would translate to $241 worth of S&P 500 earnings, before an 11% jump in 2025 to $268 and an additional 7% leap in 2026 to $288. The index's earnings multiple should stay near 22x.Impressive performances from usual suspects also underpinned the S&P 500's move higher. Kostin noted in a separate early-October note that mega-cap growth stocks like Alphabet, Amazon, Apple, Meta, Microsoft, and Nvidia accounted for 44% of the market's gain through the third quarter, where it was up 20.8% and 22%, including dividends.
All 11 S&P 500 sectors are in positive territory this year, though some have fared much better than others. Communication services and information technology were the best year-to-date performers through the first week of October, though utilities weren't far behind since they also have exposure to artificial intelligence. However, this trade may be losing some steam.
"Performance of the AI infrastructure trade slowed in 3Q, with a basket of AI infrastructure stocks only rising by 4% vs. 15% during 1H," Kostin wrote in early October.
28 stocks to buy for strong profit growthIn recent weeks, Goldman Sachs has shared lists of stocks that are becoming more efficient, will benefit from dissipating wage growth, and are mid-sized standouts. This month, the firm shared a coveted list of companies with the strongest expected earnings growth in 2025.
Below are the 28 stocks among the 100 biggest names in the S&P 500 that analysts think will have higher profit growth than the index's 15% rate next year, along with their ticker, market capitalization, and expected earnings growth in 2024 and 2025. "NM" means "not meaningful."
1. Micron Technology
Ticker: MU
Market cap: $114.9B
Expected earnings growth in 2024: NM
Expected earnings growth in 2025: 162%
Source: Goldman Sachs
2. Uber Technologies
Ticker: UBER
Market cap: $156.9B
Expected earnings growth in 2024: 26%
Expected earnings growth in 2025: 113%
Source: Goldman Sachs
3. Gilead Sciences
Ticker: GILD
Market cap: $106.2B
Expected earnings growth in 2024: -43%
Expected earnings growth in 2025: 88%
Source: Goldman Sachs
4. Advanced Micro Devices
Ticker: AMD
Market cap: $277.7B
Expected earnings growth in 2024: 29%
Expected earnings growth in 2025: 60%
Source: Goldman Sachs
5. Nvidia
Ticker: NVDA
Market cap: $3,175B
Expected earnings growth in 2024: 118%
Expected earnings growth in 2025: 42%
Source: Goldman Sachs
6. Eli Lilly
Ticker: LLY
Market cap: $855.3B
Expected earnings growth in 2024: 160%
Expected earnings growth in 2025: 40%
Source: Goldman Sachs
7. Tesla
Ticker: TSLA
Market cap: $768.5B
Expected earnings growth in 2024: -27%
Expected earnings growth in 2025: 36%
Source: Goldman Sachs
8. KKR & Co.
Ticker: KKR
Market cap: $116.9B
Expected earnings growth in 2024: 36%
Expected earnings growth in 2025: 31%
Source: Goldman Sachs
9. Analog Devices
Ticker: ADI
Market cap: $112.3B
Expected earnings growth in 2024: -32%
Expected earnings growth in 2025: 31%
Source: Goldman Sachs
10. Blackstone
Ticker: BX
Market cap: $182.6B
Expected earnings growth in 2024: 16%
Expected earnings growth in 2025: 30%
Source: Goldman Sachs
11. Charles Schwab
Ticker: SCHW
Market cap: $118.9B
Expected earnings growth in 2024: -3%
Expected earnings growth in 2025: 29%
Source: Goldman Sachs
12. Prologis
Ticker: PLD
Market cap: $111.2B
Expected earnings growth in 2024: -19%
Expected earnings growth in 2025: 28%
Source: Goldman Sachs
13. Citigroup
Ticker: C
Market cap: $119.8B
Expected earnings growth in 2024: -6%
Expected earnings growth in 2025: 26%
Source: Goldman Sachs
14. Lam Research
Ticker: LRCX
Market cap: $105B
Expected earnings growth in 2024: 17%
Expected earnings growth in 2025: 26%
Source: Goldman Sachs
15. Broadcom
Ticker: AVGO
Market cap: $827.7B
Expected earnings growth in 2024: 20%
Expected earnings growth in 2025: 25%
Source: Goldman Sachs
16. GE Aerospace
Ticker: GE
Market cap: $202.4B
Expected earnings growth in 2024: 51%
Expected earnings growth in 2025: 23%
Source: Goldman Sachs
17. Amazon
Ticker: AMZN
Market cap: $1,906B
Expected earnings growth in 2024: 66%
Expected earnings growth in 2025: 23%
Source: Goldman Sachs
18. Texas Instruments
Ticker: TXN
Market cap: $184.1B
Expected earnings growth in 2024: -26%
Expected earnings growth in 2025: 22%
Source: Goldman Sachs
19. KLA
Ticker: KLAC
Market cap: $105.2B
Expected earnings growth in 2024: 14%
Expected earnings growth in 2025: 21%
Source: Goldman Sachs
20. Merck
Ticker: MRK
Market cap: $275.9B
Expected earnings growth in 2024: 438%
Expected earnings growth in 2025: 21%
Source: Goldman Sachs
21. Netflix
Ticker: NFLX
Market cap: $305B
Expected earnings growth in 2024: 56%
Expected earnings growth in 2025: 20%
Source: Goldman Sachs
22. ServiceNow
Ticker: NOW
Market cap: $188.7B
Expected earnings growth in 2024: 29%
Expected earnings growth in 2025: 20%
Source: Goldman Sachs
23. T-Mobile
Ticker: TMUS
Market cap: $244.6B
Expected earnings growth in 2024: 35%
Expected earnings growth in 2025: 18%
Source: Goldman Sachs
24. Applied Materials
Ticker: AMAT
Market cap: $165.9B
Expected earnings growth in 2024: 5%
Expected earnings growth in 2025: 17%
Source: Goldman Sachs
25. Mastercard
Ticker: MA
Market cap: $456.6B
Expected earnings growth in 2024: 15%
Expected earnings growth in 2025: 16%
Source: Goldman Sachs
26. Intuit
Ticker: INTU
Market cap: $169.8B
Expected earnings growth in 2024: 11%
Expected earnings growth in 2025: 16%
Source: Goldman Sachs
27. Fiserv
Ticker: FI
Market cap: $107.2B
Expected earnings growth in 2024: 11%
Expected earnings growth in 2025: 16%
Source: Goldman Sachs
28. Intuitive Surgical
Ticker: ISRG
Market cap: $168.6B
Expected earnings growth in 2024: 17%
Expected earnings growth in 2025: 16%
Source: Goldman Sachs
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