Goldman's Warning About Overvalued Stocks

Goldman Sachs made a terrifying warning to investors across the world about very popular overvalued/oversaturated stocks.

The banking company said that the dangers of even touching overvalued stocks could become a significant risk factor in the future, especially with how volatile 2025 is expected to become with the most radical changes in economic policy since the 2008 Recession.

Goldman Sachs said that overvalued stocks this year will try to "correct" themselves more, meaning that their share prices will tend to trend to their natural tangible fiscal value, which may not always mean upward. They said that market volatility could cause this, as future Fed rate cuts become less and less likely, bond yields rise, and even more instances of overvalued stocks. We can name a long list of popular stocks that are very overvalued. Amongst the biggest of these tickers include Nvidia, Broadcom, Meta, Palantir, and to an extent Crowdstrike. Sachs is warning investors not to put their money into these tickers long-term, as their share prices may trend downward towards their natural value.

"While we expect equity markets to make further progress over the year as a whole — largely driven by earnings — they are increasingly vulnerable to a correction driven either by further rises in bond yields and/or disappointments on growth in economic data or earnings," Goldman Sachs strategist Peter Oppenheimer stated to Yahoo Finance on Thursday.

This may spell disaster for a very significant portion of the NYSE. If earnings reports are not well enough in 2025, we may see the first year of general decline for many of these stocks since the 2020 pandemic.