Goldman Sachs, one of the leading investment banking firms, has recently revealed its top long-term beneficiaries of artificial intelligence (AI) in the stock market. The firm suggests that stock investors should focus on companies that have the potential to benefit from AI adoption in the long run, rather than those that have already experienced significant appreciation in their share prices due to AI implementation.
According to David J. Kostin, the chief U.S. equity strategist at Goldman Sachs, companies that have already benefited from near-term AI implementations include major players like NVIDIA, Meta, Amazon, Salesforce, Marvell Technology, Adobe, Alphabet, ServiceNow, Microsoft Corporation, Intuit, and Credo Technology. These companies have recorded an average return of 66% so far this year, while the broader S&P 500 index has seen a year-to-date return of 15%.
However, Goldman Sachs believes that the real potential lies in companies that are yet to fully harness the power of AI. These long-term beneficiaries have the opportunity to enhance their earnings per share through increased sales and improved profit margins. To support this claim, Kostin refers to the Russell 1000 companies, the top 1000 U.S. companies by market capitalization, which could experience a median 19% increase in their earnings per share with the help of AI.
To further illustrate the potential impact of AI on various sectors, Kostin has listed 50 companies from sectors including communication services, consumer discretionary, consumer staples, energy, financials, healthcare, industrials, information technology, materials, real estate, utilities, and more. These companies are expected to witness a significant increase in their baseline earnings, with some even reaching up to a remarkable 388% boost, thanks to the integration of AI.
In the communication services sector, companies like Pinterest, New York Times Company, News Corp., and ZoomInfo Technologies Inc. have the potential to see considerable changes in their baseline earnings driven by AI adoption. Similarly, consumer discretionary firms such as H&R Block, Kohl’s Corp., Coupang, CarMax, and Amazon.com are projected to experience notable benefits from AI integration.
Other sectors like consumer staples, energy, financials, healthcare, industrials, information technology, materials, real estate, and utilities also have companies poised to leverage AI for substantial earnings growth.
Goldman Sachs’ findings emphasize the importance of identifying companies that are set to reap long-term benefits from AI adoption. By focusing on these companies, stock investors have the potential to capitalize on future growth opportunities instead of solely relying on the near-term beneficiaries. This strategic approach can help investors navigate the stock market landscape and maximize their investment returns.
Overall, Goldman Sachs’ research sheds light on the transformative potential of AI and how it can reshape various industries in the coming years. As AI technologies continue to evolve and mature, companies that successfully adopt and leverage them stand to gain a significant competitive edge, driving growth and profitability in the long run.
