Goldman Sachs’ equity strategists team led by Peter Oppenheimer recently unveiled a thought-provoking analysis titled “Why AI is not a bubble,” stating that the new technology is still in its infancy and has the potential to continue outperforming other markets in the future.
This came amid the soaring performance of AI-related stocks in 2023 with questions emerging among investors and analysts about a potential bubble in the AI sector.
AI vs. Dot-Com Bubble: What’s The Crucial Difference?
Drawing parallels with the dot-com bubble of the late ’90s, Goldman Sachs acknowledges that in both cases, investors recognized the potential for groundbreaking innovations.
The tech boom of the ’90s saw the fast rise of major tech companies, but the bubble burst and wiped out newcomers who hadn’t yet turned profitable.
In contrast, the current AI ecosystem boasts a crucial difference: early winners show robust financial positions and impressive returns on investment.
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Meet The AI “Early Winners“
Goldman Sachs has identified 11 U.S. companies poised to reap the rewards of the AI revolution in its early stages. The list has been categorized into three distinct subgroups:
- Enablers: NVIDIA Corp. (NASDAQ:NVDA), Marvell Technology Group Ltd. (NASDAQ:MRVL), and CrowdStrike Holdings Inc. (NASDAQ:CRWD)
- Hyperscalers: Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL), and Amazon.com, Inc. (NASDAQ:AMZN)
- Empowered Users: Meta Platforms Inc. (NASDAQ:META), Salesforce.com Inc. (NYSE:CRM), Adobe Inc. (NASDAQ:ADBE), ServiceNow Inc. (NYSE:NOW) and Intuit Inc. (NASDAQ:INTU).
According to Goldman Sachs, AI’s pioneers are anticipated to continue outperforming as the technology scales, having already risen significantly this year, increasing 65% as a basket.
Where To Find Value In AI Technological Revolution
Goldman Sachs identified elevated opportunities in the so-called “reformers” that are reshaping industries using AI. Companies with exceptional execution skills, known as “adaptors,” may also provide attractive investment opportunities.
As AI adoption becomes widespread, consumers are likely to benefit, and companies that capitalize on this shift may outperform market expectations.
Goldman Sachs has also unveiled a long-term portfolio comprising 50 stocks, strategically positioned to harness the growth potential of AI evolution. Find out which 50 stocks Goldman Sachs considers to be the best in the AI space, by clicking here.
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