These are the top stocks to play AI, Goldman Sachs tells clients
The hoped-for benefits — and profits — springing from artificial intelligence triggered a powerful rally in the market, and Goldman Sachs believes several stocks could prove the leading players in the burgeoning technology. The Wall Street bank estimated that recent advances in AI could add $7 trillion to annual global gross domestic product over 10 years due to surging labor productivity. Given the growth potential, Goldman looked to recent earnings call transcripts to identify the companies that are actively discussing the potential opportunities, and risks, from AI. Goldman found a basket of 24 companies that are pursuing AI or can help enable new technologies across software, semiconductors, tech hardware, media, internet and information technology services. Fifteen of them are rated buy at Goldman. Big Tech names Amazon , Alphabet , Microsoft , Meta and Apple dominated the list. Alphabet has been a popular AI play among high-profile investors such as Bill Ackman and Stanley Druckenmiller. Alphabet’s Google unit recently announced it will bring AI features to its internet search engine to turn complex queries into simple answers by combining results from multiple sources. Microsoft is another red-hot AI bet as the company recently expanded a multiyear, multibillion-dollar investment in ChatGPT maker OpenAI, marking the third phase of their partnership. Meanwhile, Meta Platforms has touted AI computer chips, which will eventually power more advanced metaverse-related tasks, including virtual reality and augmented reality, as well as generative AI. AI enabler Nvidia is also high on the list. The chip giant touched a $1 trillion market capitalization on Tuesday, as investors piled into the stock after its shockingly strong forecast of future demand. Other AI enablers in the semiconductor and cybersecurity areas included AMD , Micron Technology , Marvell Technology and Palo Alto Networks , which have all rallied along with Nvidia. Goldman also highlighted software names that are either pursuing AI or would act as enablers of AI, including Datadog , CrowdStrike , Snowflake and Salesforce. — CNBC’s Michael Bloom contributed reporting.
