As market dynamics evolve, investors are keen to find their footing in an environment that promises greater opportunities for active stock pickers. Goldman Sachs’ chief U.S. equity strategist, David Kostin, has highlighted this trend, observing significant changes in the stock market landscape as we enter 2024. With the S&P 500 anticipating its highest annual dispersion levels since 2007—save for recessionary periods—the environment signals diminished correlation among individual stocks. This scenario creates more potential for discerning investors to identify lucrative opportunities that may yield returns superior to the broader market.
Kostin emphasizes that the current setting is conducive for “alpha generation,” a term referring to the excess returns earned on an investment relative to the market index, after adjusting for risk. This favorable backdrop is partly attributable to declining macroeconomic uncertainties and the increasing relevance of thematic discussions, particularly those surrounding artificial intelligence (AI) and the impending U.S. elections. Investors are likely to benefit from this trend by honing in on specific stocks, relying more on company fundamentals rather than broad market movements.
Interestingly, since the beginning of 2023, the stock market has shown a pronounced micro-driven approach, amplifying the potential for selective investments. As this trend is expected to persist, the resilience of the market hinges on healthy economic growth and the varied responses of stocks to their exposure to AI advancements. Kostin’s analysis predicts that this high dispersion will endure into 2025, indicating a clear departure from traditional, macro-driven investment strategies.
With this context, his team has embarked on a systematic evaluation of stocks poised to deliver strong returns. By calculating dispersion scores—where a higher score equates to a greater potential for risk-adjusted returns—Kostin has curated a list of ten stocks to keep an eye on. These stocks not only exemplify this dispersion but also showcase company-specific drivers that are likely to influence their market performance.
Leading the pack is Super Micro Computer, which boasts an impressive dispersion score of nearly 32. This surge in its stock price, which has escalated over 75% in 2025, sets it up for a remarkable seventh consecutive winning year. An important factor fueling this growth is the anticipation of alleviated regulatory scrutiny. The company’s recent optimistic announcement regarding its compliance with U.S. Securities and Exchange Commission (SEC) deadlines adds to the positive momentum. However, market analysts echo a cautionary outlook, predicting a potential correction following this meteoric rise, with many holding a “hold” rating and forecasts indicating a decline of over 16%.
Following closely is Enphase Energy, which has garnered the second-highest score among S&P 500 stocks, registering a score of 20.5. Contrasting with Super Micro’s upward trajectory, Enphase’s stock has faltered by approximately 5% in 2025, putting the company at risk of finishing its third consecutive negative year. Nevertheless, analysts remain cautiously optimistic, as the average price target suggests a rebound of over 21% in the coming year.
While the selected stocks exhibit strong potential, they could also face heightened volatility. Historical patterns indicate that stocks such as Super Micro have experienced wild fluctuations, with remarkable rallies that can quickly reverse. For instance, this stock previously surged more than 300% within a year before plummeting over 85% from its peak. Such volatility highlights the risks tied to active stock-picking strategies, underscoring the necessity for investors to balance their pursuit of returns with a stringent analysis of market conditions and inherent risks.
As we look ahead to 2025, the landscape for stock pickers appears illuminated by opportunities birthed from high dispersion among stocks. With declining macroeconomic uncertainties and the prominence of innovation themes like AI, the potential for substantial returns exists for those willing to navigate the intricacies of an evolving market. Nevertheless, along with opportunities come risks, demanding a comprehensive approach to investment that incorporates rigorous analysis and consideration of volatility.