Published: January 2, 2026 | Category: US Analyst Picks
Goldman Sachs’ portfolio strategy team is bullish on small-caps for 2026 — and they’re warning investors to stop chasing mega-caps. ⚠️
“Our baseline macro outlook is supportive for small-cap upside in early 2026. We do not believe markets are fully pricing the likely strength of the US economy next year, and small-caps typically outperform during cyclical rallies.“
— Goldman Sachs Portfolio Strategy Team
While everyone piles into NVIDIA and the Magnificent 7, Goldman’s analysts have identified asymmetric opportunities in overlooked small and mid-cap names. Here are their top picks with the most compelling risk/reward setups.
1️⃣ Opera Limited (OPRA)
AI Browser
Asymmetric Upside
Goldman Sachs analyst Eric Sheridan calls Opera “one of the most asymmetric ideas” across his entire coverage universe. The Norwegian AI browser company offers compelling upside for compounded revenue growth and upward margin trajectory.
“The stock screens as one of the most asymmetric ideas across our coverage universe for compounded revenue growth and upward margin trajectory. We remain convinced that Opera is positively levered to long-term secular tailwinds within digital advertising.”
— Eric Sheridan, Goldman Sachs
- Long-term secular tailwinds in digital advertising
- AI browser innovation driving user engagement
- Gaming integrations and commerce features
- Sustained double-digit revenue growth potential
2️⃣ ACV Auctions (ACVA)
Digital Transformation
Market Disruption
ACV Auctions is disrupting the $200+ billion wholesale auto market. The secular shift from offline to digital is just beginning, and Goldman sees a long runway for growth.
“Over the long-term, we believe ACVA has a long runway to grow against: 1) the secular shift of wholesale auto sales moving from offline to digital; 2) the fragmentation of the market; 3) territory expansion and increasing wallet share.”
— Eric Sheridan, Goldman Sachs
- Offline → Digital wholesale auto sales migration
- Highly fragmented market ripe for consolidation
- Territory expansion across US
- AI-powered vehicle inspections
- Increasing dealer wallet share
3️⃣ Houlihan Lokey (HLI) ⭐ TOP PICK
Investment Banking
Restructuring
Goldman’s TOP PICK with the highest potential upside (+36%). Houlihan Lokey is a global investment bank with a unique defensive characteristic: 22% of revenue comes from restructuring advisory.
This segment should see outsized growth in any economic downturn scenario, making HLI a “win-win” investment — it benefits from both economic strength (M&A activity) and weakness (restructuring demand).
- Highest Upside: +36% potential return
- Restructuring Moat: 22% revenue from restructuring advisory
- Counter-Cyclical Hedge: Wins in economic downturns
- M&A Recovery: Also benefits from deal activity rebound
- Elite Market Position: Top-tier restructuring franchise
4️⃣ Astera Labs (ALAB)
Data Center
Connectivity
Goldman identifies Astera Labs as one of the “picks and shovels” plays on the AI boom. The company provides critical semiconductor connectivity solutions for hyperscale AI infrastructure.
“In the small and mid-cap space, we see potential opportunities among enablers, so-called ‘picks and shovels’ of the AI boom, including companies on the front line of AI innovation.”
— Goldman Sachs
- Critical connectivity for AI data centers
- Hyperscaler customer base (Meta, Google, Microsoft)
- Triple-digit growth rates maintained
- Multiple product cycles yet to ramp
- “Picks and shovels” of AI boom
📈 Why Small-Caps Outperform in 2026
Goldman Sachs Portfolio Strategy Team outlines the macro setup:
Accelerating Growth
US economic expansion
Below-Consensus Inflation
Price pressures easing
Fed Easing
Continued rate cuts
“We do not believe markets are fully pricing the likely strength of the US economy next year, and small-caps typically outperform during cyclical rallies.“
— Goldman Sachs Portfolio Strategy Team
📊 Goldman’s Small-Cap Picks Summary
| Stock | Analyst | Sector | Thesis |
|---|---|---|---|
| OPRA | Eric Sheridan | Digital Ads | Asymmetric upside |
| ACVA | Eric Sheridan | Auto Auctions | Digital disruption |
| HLI ⭐ | James Yaro | Investment Bank | +36% Top Pick |
| ALAB | Goldman Coverage | AI Semis | Picks & Shovels |
⚠️ Risk Disclaimer
- Small-Cap Volatility: Higher beta than large-caps
- Economic Sensitivity: More vulnerable to macro slowdown
- Liquidity Risk: Lower trading volumes can amplify moves
- Analyst Targets: Price targets are opinions, not guarantees
This content is for informational purposes only and does not constitute investment advice. Always conduct your own research before making investment decisions. Small-cap stocks carry higher risk and volatility compared to large-cap stocks. Past performance does not guarantee future results.