Goldman Sachs says these undervalued stocks are 'well positioned' to outperform

Goldman Sachs reiterated/initiated buy calls across O’Reilly (ORLY), NetEase (NTES), Tradeweb (TW) and Liftoff Mobile, arguing each is undervalued versus fundamentals and has upside in July. For ORLY, Goldman points to stronger-than-peers 2Q comp trends and less competitive pressure within a 5–10 mile radius, seeking to allay fears of a softer 2Q comp; ORLY is down ~1% in 2026. For NTES, Goldman frames the stock as a “non-AI” compounder with margin expansion potential and a new game launch in July, noting shares down >7% YTD, while TW was upgraded to Buy despite concerns over credit-related growth durability and tokenization risks.

Analysis

This is mostly a flow-driven setup, not a clean fundamental inflection. The biggest near-term edge is where the market still has to re-underwrite growth visibility: NTES and LFTO can rerate if investors buy the idea that their margins expand without the same AI capex burden as peers. By contrast, ORLY is a lower-risk share-gain story where the market’s main job is to stop discounting a comp air-pocket; that tends to work best when the next print confirms resilience, not on the call itself.

For NTES, the market is underestimating how much capital can rotate into a “cash-generative non-AI compounder” in a China internet sleeve that has become crowded with expensive AI narratives. The first catalyst is the July launch cycle; the second is whether margin expansion shows up in 2H guidance. Falsify the thesis if the new title underwhelms or if China internet sentiment improves broadly enough that NTES loses its relative scarcity premium.

LFTO looks more levered to ad budget mix than headline digital ad growth: direct-response and in-app spend can hold up even if upper-funnel brand budgets soften. The risk is that ad tech remains an efficiency trade, so any deceleration in mobile app installs or a pricing reset at Meta/Google could compress the multiple quickly. TW is the more contrarian name: tokenization is a years-out narrative, while the real near-term swing factor is whether credit volumes reaccelerate enough to offset tough comps; that makes it more of a 6-18 month compounder than a tactical trade today.

Key Decisions for Investors

• Buy NTES on weakness over the next 1-2 sessions; target a 10-15% move over 1-3 months into the July game catalyst, with a stop if launch commentary disappoints or management trims margin guidance.
• Pair trade: long NTES / short KWEB or a China internet basket for 4-8 weeks to isolate the 'non-AI compounder' relative-value trade; thesis breaks if policy stimulus or AI monetization improves sentiment across the group.
• Accumulate LFTO only on pullbacks and size it as a medium-duration growth position, not a momentum trade; best risk/reward is 6-12 months if ad-tech spend remains bottom-funnel oriented.
• Long ORLY / short AAP as a sector-share-gain pair for 1-3 months; ORLY should outperform if channel checks translate into a clean comp print, but the trade fails if AAP shows margin stabilization or ORLY’s comp decelerates.
• TW is a watchlist add rather than an immediate chase: buy only if the next volume/credit data point confirms growth durability; otherwise the stock can stay range-bound despite favorable long-term tokenization skepticism.