Goldman Sachs Identifies 25 High-Volatility Stocks Poised for Big Moves in 2025

Stock-Picking Strategies for 2025: Volatile Sectors Hold the Key Investors looking to outperform the market should turn their attention to high-volatility stocks in the consumer discretionary, information technology, and communications services industries, according to strategists at Goldman Sachs.

Goldman’s research highlights that in 2024, stock movements in the S&P 500 were more influenced by company-specific factors than macroeconomic trends, creating a favorable stock-picking environment.

Record Dispersion in S&P 500 Returns Signals Stock-Picking Opportunities David Kostin, a strategist at Goldman Sachs, noted in a February 14 report that return dispersion among S&P 500 stocks in 2024 rose to 70 percentage points, the highest level outside of recessions since 2007. Historically, high return dispersion signals greater potential for investors to generate alpha through stock selection.

Over the past six months, 74% of S&P 500 stock returns have been attributed to individual company performance, significantly above the 20-year average of 58%, according to Goldman Sachs’ findings.

This trend is expected to persist into 2025, with economic conditions and the rise of artificial intelligence technology driving further differentiation among stocks. Additionally, ongoing policy uncertainty, particularly following President Trump’s trade tariffs, has amplified market volatility.

Economic Uncertainty Fuels Market Volatility The Economic Policy Uncertainty Index spiked to its highest level since the onset of the COVID-19 pandemic following President Trump’s announcement of tariffs targeting Mexico, Canada, and China. Historical data indicates that higher levels of economic policy uncertainty coincide with greater return dispersion, providing a ripe environment for stock pickers to distinguish market winners from losers.

Goldman Sachs’ 25 High-Dispersion Stocks for 2025 Goldman Sachs has developed a “dispersion score” to identify stocks where company-specific volatility could drive significant price swings. While a high dispersion score does not necessarily indicate a buy recommendation, it highlights stocks with potential for both strong outperformance and underperformance.

Here’s Goldman Sachs’ list of 25 S&P 500 stocks with the highest dispersion scores:

Dispersion Score Insights The median dispersion score for these top 25 stocks is 7.5, significantly above the S&P 500 median of 2.0. Notably, Super Micro Computer (SMCI) tops the list with a dispersion score of 31.9, highlighting its extreme volatility potential.

Goldman Sachs emphasizes that while these stocks present greater trading opportunities, their performance is driven by firm-specific factors rather than broad macroeconomic movements.

“Stocks with high dispersion scores are as likely to generate large alpha through underperformance as through outperformance,” the report states.

Sector-Specific Volatility and Investment Strategy Goldman’s research found that sectors like Real Estate and Utilities have the lowest dispersion scores, offering limited opportunities for alpha generation. Conversely, technology, healthcare, and consumer discretionary sectors present the most volatile stocks with significant stock-picking potential.

With 2025 shaping up to be another micro-driven market environment, investors looking for outsized returns should focus on stock-specific opportunities in high-volatility sectors.