Goldman Sachs is telling investors to look beyond the recent surge in takeover activity and focus on companies that could still become acquisition targets, arguing the market has yet to fully price in the accelerating merger cycle. Announced U.S. mergers and acquisitions have reached about $1.2 trillion so far this year, up 32% from the same period in 2025, while the number of announced deals has climbed 12%, according to Goldman. Deal activity has increased sequentially in every month this year, fueled by easy financial conditions, steady economic growth, healthy chief executive confidence and a favorable regulatory backdrop, the firm said. Despite that backdrop, Goldman said valuations of likely acquisition targets do not yet reflect an above-average probability of being bought. “Likely M & A targets should benefit from the ongoing surge in M & A activity, which does not appear to be fully priced in their valuations,” Goldman strategists wrote in a note to clients. The bank’s basket of 71 stocks identified by its equity analysts as having at least a 15% probability of being acquired over the next 12 months has outperformed the equal-weight S & P 1500 index by roughly 8 percentage points since the end of the first quarter. Goldman refreshed the basket on July 1. Gains in the past month were initially led by biotechnology companies amid a wave of announced healthcare transactions and renewed management commentary supporting acquisitions. More recently, potential targets in the technology, media and telecommunications sector have also begun to outperform, with strength broadening across other industries over the past two weeks, Goldman said. Among the highest-ranked takeover candidates outside biotechnology are Imax , ConocoPhillips , Freeport-McMoRan , Diamondback Energy , Occidental Petroleum , SBA Communications , according to the report. Goldman also highlighted software companies Nutanix and Dynatrace . Goldman said the current M & A cycle still appears to be around its midpoint when compared with previous cycles, suggesting dealmaking could remain robust in the months ahead. The bank cautioned that a deterioration in investor sentiment could derail the recovery in acquisitions, however.
