Goldman Sachs says buy the dip in these five stocks before it's too late

Goldman Sachs reiterated “buy the dip” calls on Alibaba and several US retailers/industrials—citing attractive valuation after YTD drawdowns (Ulta down ~7% YTD, Burlington down ~8% YTD, Viking down ~20% in the past month). For Ulta, Goldman flagged concerns over promotional intensity and implied sequential top-line deceleration, but argued the stock is positioned to keep gaining share; for Burlington, it noted 2Q comps +2% and 3Q comp guidance that missed, while still pointing to margin flow-through and new-store productivity. Goldman also expects Alibaba’s EPS to recover +64%/+33% YoY for FY27E/FY28E, driven by AI + Cloud leadership and an eCommerce profit recovery, maintaining a Buy.

Analysis

The cleanest theme here is not “cheap stocks,” but multiple repair in businesses where consensus is discounting a bad operating trend that may be peaking. That setup can work for 1-3 months if the next print confirms stability, but the second-order risk is that these names can rerate back down quickly if management only meets, rather than raises, near-term guidance. In other words, the trade is less about outright fundamentals and more about how much investor skepticism can unwind before the next hard datapoint.

Among the group, BABA looks best on a 6-18 month horizon because cloud/AI mix can improve incremental margins faster than the market is giving credit for, while the e-commerce drag is more contained if loss-making subsegments keep narrowing. The real loser is not just weaker China retail peers, but any broad China basket that fails to capture the higher-quality growth mix; that argues for idiosyncratic exposure rather than beta. The falsifier is simple: if cloud growth fails to reaccelerate or quick-commerce losses stay sticky, the EPS story becomes a multiple trap.

BURL and ULTA are more tactical. BURL benefits if trade-down behavior persists and inventory discipline stays tight, but the upside is capped if comp trends keep decelerating faster than cost leverage can offset; ULTA is the higher-quality version of the same “consumer resilience” bet, with the main bear case being promotion intensity compressing category margins. VIK is a slower-burn structural winner if premium travel demand stays intact, but it’s vulnerable to any consumer confidence rollover or operational noise; ACM is the cleanest contrarian, where the market may be overpricing AI disruption relative to the durability of project backlog, while legacy claims remain the timing risk rather than the thesis killer.

Key Decisions for Investors

• Long BABA vs. short KWEB for 3-6 months: express idiosyncratic cloud/AI margin upside while reducing China macro beta; thesis breaks if cloud reacceleration is not visible in the next 1-2 quarters.
• Buy ULTA on weakness for a 1-3 month trade, but size modestly: best reward/risk if promotional pressure proves temporary; cut if comp momentum fails to stabilize versus guidance.
• Pair long BURL / short XRT for 1-2 quarters: captures trade-down resilience and operating leverage while avoiding broad discretionary beta; invalidate if gross margin flow-through stalls.
• Watch VIK rather than chase it: prefer entry only after volatility compresses or if shares de-rate another 5-10%; the upside is 6-18 months, but near-term weather/consumer noise can dominate.
• Use ACM as a catalyst watchlist name, not a conviction buy yet: if legacy claim risk fades or is quantified, multiple expansion could be meaningful; if not, the stock can remain trapped despite decent fundamentals.