Goldman’s long-term AI winners portfolio: An inside look at its holdings

Artificial Intelligence: Goldman Sachs’ Long-Term Winners

Investors in the artificial intelligence industry are eagerly anticipating what the future holds, and according to Goldman Sachs, there are some clear long-term winners that could come out on top. Generative AI is expected to bring benefits to companies as a whole, but in the initial phase of the AI trade, only a handful of companies have seen significant gains.

One standout in this early phase is Nvidia, whose stock has risen more than 70% this year. As investors look to the future of the AI chipmaker, many analysts are increasing their price forecasts ahead of Nvidia’s GTC Conference this week. On Monday, Nvidia shares were up more than 2%.

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Analyst Ryan Hammond predicts that there will be four total stages in the AI trade, with the second phase set to benefit companies that build and maintain infrastructure for AI, such as chipmakers and cloud providers. In the third phase, companies using AI to drive revenue growth will see a boost, while the fourth and final phase is where the long-term winners are expected to emerge. These companies will enhance their bottom lines by leveraging the productivity gains made possible by AI.

Hammond believes that companies in the software, commercial, and professional services sectors will be the primary beneficiaries of AI adoption in the final phase. Amazon, Pinterest, Walmart, The New York Times, and Kohl’s are among the companies that Goldman Sachs has identified as potential winners in this AI revolution.

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Amazon, already up more than 15% this year, could see a 39% increase in earnings per share thanks to productivity gains from AI. Similarly, Pinterest may experience a 162% jump in baseline earnings, despite being down more than 7% this year. Walmart, up over 15%, has the potential to lower labor costs through automation, with Goldman Sachs estimating a 44% boost to earnings per share over time.

As the AI industry continues to evolve, these companies are poised to capitalize on the transformative power of artificial intelligence to drive growth and increase profitability. Investors will be closely watching as these winners emerge in the rapidly expanding AI trade.

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