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AI concept stocks hit new highs: When will the party end?
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Missed out on Nvidia? These Alternatives Are Expected to See Growth: Goldman Sachs

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Moomoo News Global joined discussion · Mar 20 05:23
The landscape of U.S. equities is abuzz with anticipation as artificial intelligence (AI) cements its place as a transformative force in the technology sector. In a recent analysis by $Goldman Sachs(GS.US)$, optimism for AI integration remains robust, yet valuations steer clear of the vertiginous heights of previous market bubbles.
Goldman Sachs' insights reveal that market-implied long-term growth expectations have climbed to 11%, outpacing the historical average but falling short of the fervor witnessed during the Tech Bubble (16%) and late 2021 (13%). This tempered confidence is mirrored in valuations of the top 10 Technology, Media, and Telecom (TMT) stocks, which, at a forward price-to-earnings ratio of 28x, are elevated but not extravagant when juxtaposed against past peak of the Tech Bubble (52x) and late 2021 (43x).
AI enthusiasm fuels animal spirit among investors. Some individual investors are speculating on a significant increase in $NVIDIA(NVDA.US)$'s stock price by the end of the week. There was notable interest in bullish positions during the afternoon trading session, with investors showing confidence that the stock could more than double its current closing price in a short timeframe on Monday.
Phase 2: Infrastructure
The infrastructure phase involves companies that provide the essential components and services necessary for AI to function, such as semiconductor firms, cloud providers, and data center operators. These entities are foundational to the AI ecosystem, and investment in this phase means backing the core building blocks of AI technology.
At this stage, Goldman Sachs lists 93 companies that meet the "AI Infrastructure" criteria.
Utility companies include: $NextEra Energy(NEE.US)$, $Southern(SO.US)$, $Duke Energy(DUK.US)$, and others;
Phase 3: Enabled revenues
This phase focuses on companies that can integrate AI into their existing products and services to enhance functionality and create new revenue streams. It includes software and IT service companies that stand to benefit from the demand for AI-powered solutions across various industries.
At this phase, Goldman Sachs lists 31 U.S.-listed companies, including software companies such as $Intuit(INTU.US)$, $Nutanix(NTNX.US)$, $ServiceNow(NOW.US)$, $Datadog(DDOG.US)$, and $Zscaler(ZS.US)$, and software companies such as $MongoDB(MDB.US)$, $Cloudflare(NET.US)$, $Snowflake(SNOW.US)$ and other IT services companies.
Notably, Goldman Sachs said that stocks recommended in the Stage 3 have returned nearly 8% year-to-date. While it is the excess returns of these stocks that are driven by factors other than AI, investor interest in these stocks is on the rise.
Phase 4: Productivity gains
The final phase targets businesses across numerous sectors that can leverage AI to enhance productivity and efficiency. This phase is about the widespread application of AI to achieve cost savings and improvements in operations, which could lead to significant gains in earnings for companies that successfully implement AI technologies.
At this stage, Goldman Sachs lists 50 companies, including retail giants $Walmart(WMT.US)$ and $Costco(COST.US)$, healthcare companies $Illumina(ILMN.US)$ and $Tenet Healthcare(THC.US)$, as well as the $New York Times(NYT.US)$, which is in the midst of a lawsuit with OpenAI.
Goldman Sachs noted that Phase 2 and Phase 3 deals should precede Phase 4, as many of the companies in those two phases have a necessary presence for other companies to use AI to improve productivity.
Goldman Sachs underscores the strategic importance of AI in shaping the future of technology investment. As these phases of AI integration progress, investors are poised to witness a reshaping of the market landscape, with AI serving as both a catalyst for growth and a beacon for innovation.
Source: Goldman Sachs
By Moomoo News Jimmy Wang
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
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