Goldman Sachs focuses on 'Fallen Angels' among tech stocks early in the year

Goldman Sachs expects the early-year strength in tech stocks to continue and presented the so-called 'Fallen Angels' stocks, which have been sharply adjusted from their highs, as promising opportunities.

According to foreign media on the 24th (local time), Goldman Sachs' trading division analyzed that with the Nasdaq-100 index having risen about 22% this year, the tech-stock rally could continue into the new year. However, it added that returns are likely to be concentrated early in the year.

Goldman Sachs focused on stocks that were previously favored by the market but have now fallen sharply from their highs. It cited Roblox, Visa, Mastercard, and DoorDash as representative examples.

These stocks' prices remain at levels well below their historical highs, but fundamentals are assessed as improving. Goldman Sachs analysts explained that each stock's price targets imply meaningful upside from current levels.

In particular, it analyzed that recovery in profitability and stabilization of business structures centered on payment and platform companies are acting positively. The trend of tech leadership gradually spreading from some large-cap stocks was also cited as background.

Goldman Sachs pointed out, however, that the possibility of macroeconomic risks emerging after 2026 still exists. Nevertheless, it judged that in the short term, undervalued stocks within the tech sector could offer attractive investment opportunities.