Written by: Rita
Goldman Sachs updated its U.S. High-Confidence List in September, adding Vertex Pharmaceuticals and removing Interactive Brokers Group; the list remains at 23 stocks.
On September 1, Goldman Sachs released its monthly report noting that all of August’s U.S. equity gains were concentrated in the first two trading days of the month, as large technology stocks continued to meet market expectations. Following this, the market entered a summer consolidation phase, with risk assets showing unclear direction—even Nvidia’s strong earnings failed to break the stalemate. The 10-year Treasury yield rose slightly by 9 basis points from the start of the month, Brent crude remained largely flat, while gold, silver, and Bitcoin rose 9%, 22%, and 24% respectively. Goldman Sachs believes the market is currently in a catalyst vacuum, with real opportunities lying in companies undergoing substantive changes that could set a new direction for the fourth quarter.
Vertex Joins: Five $10 Billion Opportunities Building Pipeline Value
Vertex is the standout on this month’s list. Goldman Sachs analyst Salveen Richter believes the large biotech company is advancing five potential billion-dollar business opportunities.
Cystic fibrosis has long been Vertex’s core strength, with the company continuously driving innovation to maintain its competitive moat. In pain, Journavex is demonstrating strong commercial momentum in acute pain, with Phase III data for diabetic peripheral neuropathy expected after Q2 2027. In kidney disease, multiple pipeline assets are advancing, with the Phase III interim data for inaxaplin in APOL1-mediated kidney disease anticipated in early 2027. Richter sees strong commercial potential for povetacicept, a best-in-class therapy for IgA nephropathy, with a PDUFA date of November 30. In hematology, the gene-editing therapy Casgevy, developed in collaboration with CRISPR, is also already in place.
Vertex plans to acquire Crinetics Pharmaceuticals, establishing its fifth commercial pillar in endocrinology. Richter believes the market's peak sales expectations for povetacicept in IgAN ($3.2 billion) are significantly lower than Goldman Sachs' $5.8 billion, and the market's peak sales expectations for Journax in acute pain ($2.3 billion) are also below Goldman Sachs' $3.9 billion. The market has not yet assigned pipeline value to inaxaplin, the DPN indication, or earlier-stage programs, meaning this potential remains undervalued.
Three standout stocks
Estée Lauder rose 5.3% in August. Following strong fourth-quarter results, Goldman Sachs analyst Bonnie Herzog raised her EBIT forecasts for 2027 to 2029 by approximately 4% and increased the target price by $12 to $112. Organic sales growth came in at 5%, nearly 200 basis points above market consensus, with fragrance and skincare segments growing 10% and 7%, respectively.
DoorDash rose 18.1%. Analyst Eric Sheridan reiterated a Buy rating following strong second-quarter results, highlighting three positive signals: improved economics across all business units, with management indicating that grocery and retail businesses are expected to achieve positive gross profit growth in the second half of 2026; increased paid conversion rate for DashPass; and continued growth in total order value for grocery and retail outpacing the overall platform.
TPG rose. The alternative asset management firm delivered strong second-quarter results, with analyst Alex Blostein raising his FRE/earnings per share estimates by approximately 10% above market consensus. Four key drivers are aligning: accelerated fundraising breadth, resilient investment performance (particularly in private equity), improved credit deployment opportunities, and accelerated transaction activity. Blostein expects base management fee growth to exceed 20% in both 2026 and 2027, positioning TPG as one of the fastest-growing companies in his alternative asset management coverage.
Five stocks under pressure
Viking Holdings fell 17.5%. Analyst Lizzie Dove noted that low water levels in Europe disrupted itineraries and triggered customer credit limits, making negative sentiment difficult to alleviate in the short term. However, Dove believes the fundamentals remain strong, pricing has exceeded expectations, and the current risk-reward ratio is attractive.
Applied Materials fell 9.6%. Despite solid second-quarter results and guidance above market consensus, the stock came under pressure. Analyst Jim Schneider noted that the issue stems from overly high market expectations, as the fundamentals remain unchanged. Schneider believes the strong earnings have laid the groundwork for capturing accelerated WFE growth in 2027, positioning Applied Materials to benefit from increased spending on DRAM and leading-edge logic.
Loar Holdings, Celestica, and Delta Air Lines all declined to varying degrees in August, but analysts have maintained buy ratings, believing that short-term volatility does not alter the long-term fundamentals.
The list is constructed following a bottom-up fundamental logic.
Goldman Sachs’ High Conviction List is curated by the Investment Review Committee of the Americas Research Division from analyst-recommended buy ideas, maintaining a portfolio of 20 to 25 stocks. The list does not reflect thematic or factor views and is based on bottom-up fundamental analysis. The 23 stocks cover multiple sectors including consumer, financials, healthcare, industrials, natural resources, and technology, each exhibiting three key characteristics: high analyst conviction, differentiated insights, and high risk-adjusted returns.
The addition of Vertex reflects untapped pipeline value and an upcoming period of dense catalysts that the market has not yet fully priced in. The removal of Interactive Brokers demonstrates that this list is a dynamically adjusted portfolio, not a static set of recommendations.
Disclaimer
This article is a compilation and interpretation by Chaoxiang Research of a third-party brokerage research report (Goldman Sachs, September 1, 2026), combined with publicly available market information. The ratings, price targets, earnings forecasts, and related judgments cited herein reflect the views of the brokerage’s analysts and represent the position of their respective institution only; they do not reflect the views of Chaoxiang Research nor constitute any investment advice.
The market carries risks; make decisions independently. This article should not be used as a basis for buying or selling any securities.