Tom Lee & Wall Street Are Buying THIS in 2026!

Tom Lee, Fundstrat's chief investment officer, identifies opportunities in MAG 7 stocks, the energy sector, and financials for 2026. He notes factors like tariffs anniversarying, Fed rate cuts, and the ISM potentially turning above 50 as reasons for optimism.

The S&P 500 has seen substantial growth, and Wall Street banks are projecting continued bullishness for 2026, with an average S&P 500 price target around 7,555, indicating over 9% upside. While AI is a major driver, opportunities also exist in financials and energy. This video aims to build a watchlist of these top investment opportunities.

Among the MAG 7, Meta stands out with the lowest forward PE multiple (25x) despite strong earnings growth, trading at a discount compared to peers like Apple and Microsoft. Meta has a high price target of $835, implying nearly 28% upside, and a shareholder yield of 3% due to share buybacks. Microsoft is highlighted for its strong financial health and diversified business model, appearing cheaper on a forward PE basis than Apple and Alphabet.

Google, the third cheapest MAG 7 stock by PE multiple, has seen a complete sentiment shift, with its stock surging. However, its forward PE is climbing for a projected earnings growth of around 11%, leading to a modest analyst price target of $336, implying only about 2.31% upside.

While generally cautious about the energy sector's reliance on volatile commodity prices, Energy Transfer is presented as an attractive exception. It offers a high starting yield of 7.8% and is projected for 26.3% upside. Its fee-based and volume-driven cash flows make it less susceptible to commodity price fluctuations, providing more predictability.

Bank of America is a favored bank stock, deemed about 10% undervalued. It offers a 2% dividend yield with strong growth and a low payout ratio. Declining interest rates are seen as a bullish macro factor for financials, spurring economic activity and increasing interest income for banks that are not overexposed to variable rate debt, like Bank of America, which also boasts strong financial health metrics.

An extended watchlist of 25 top upside stocks for 2026, according to Wall Street, is available through Simply Wall Street. This resource provides a comprehensive view of investment opportunities.