Goldman Sachs Identifies Top 10 Stocks for High Risk-Adjusted Returns Amid Volatility

Goldman Sachs has updated its Sharpe Ratio basket, a list of 50 stocks with the highest expected risk-adjusted returns. The basket has outperformed the S&P 500 so far this year, gaining 3% year-to-date. The S&P 500's overall risk-adjusted return has been lower than usual, due to increased volatility and fears around tariffs. The top 10 newest additions to Goldman's Sharpe basket include Moderna, Viatris, Enphase Energy, PG&E Corp, and Thermo Fisher Scientific.

Goldman Sachs has recently updated its Sharpe Ratio basket, a list of 50 stocks with the highest expected risk-adjusted returns. The updated basket has outperformed the S&P 500 so far this year, gaining 3% year-to-date, compared to the S&P 500's 1.7% gain [1].

The S&P 500's overall risk-adjusted return has been lower than usual due to increased volatility and fears around tariffs. Goldman Sachs strategists noted that the S&P 500's risk-adjusted return has been "lower than usual" so far in 2025 [1].

The bank rebalanced its portfolio by choosing stocks with a high prospective Sharpe Ratio, a gauge for risk-adjusted returns calculated by dividing a percentage return to a stock's consensus 12-month price target by its six-month option-implied volatility. The top 10 newest additions to Goldman's Sharpe basket include Moderna (MRNA), Viatris (VTRS), Enphase Energy (ENPH), PG&E Corp (PCG), and Thermo Fisher Scientific (TMO) [1].

Moderna, a biotechnology company, is expected to return 88% to its consensus price target with an expected return over implied volatility of 1.3. Viatris, a pharmaceutical company, is expected to return 61% with an expected return over implied volatility of 1.5. Enphase Energy, a renewable energy company, is expected to return 45% with an expected return over implied volatility of 0.6 [1].

The addition of these stocks suggests that Goldman Sachs believes they have strong growth potential and are well-positioned to deliver high returns relative to their risk levels. The bank's focus on risk-adjusted returns highlights its commitment to helping investors manage volatility and maximize returns in a challenging market environment [1].

References:

[1] https://www.businessinsider.com/stocks-to-buy-sp500-goldman-sachs-stock-picks-mrna-crm-2025-6