Goldman Sachs strategists: Semiconductor sector is highly volatile; bullish on large-cap tech stocks.
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Goldman Sachs Outlook for the Second Half of the Year: Tech Giants Continue to Fall Out of Favor; Semiconductors Remain the "King"
According to Mars Finance, as we enter the second half of 2026, Goldman Sachs derivatives expert Brian Garret stated on Thursday that investors are underweighting US tech stocks, especially the "Mag7" tech giants. The bank believes investors are ignoring blue-chip stocks and favoring beneficiaries of artificial intelligence (AI), such as the semiconductor industry. "Goldman Sachs now believes that unless hyperscale data centers demonstrate stronger earnings growth, investors may take a more cautious approach to large-cap tech companies." The bank also pointed to options market pricing as evidence of growing concerns, noting that the downside hedging cost of the Invesco QQQ ETF (tracking the Nasdaq) is already significantly higher than that of comparable small-cap stocks. "Underweighting large-cap stocks seems to be a common strategy among investors right now," Garret added. "This cautious attitude stems from the overall underperformance of the 'Mag7' in recent months." (Cailian Press)
Goldman Sachs: The US stock market rally is still supported by AI infrastructure, but it is also a potential source of volatility.
According to BlockBeats, on July 2nd, Goldman Sachs' market strategy team believes that the US stock market rally remains heavily reliant on AI infrastructure. While the S&P 500 continues to hit new highs, the driving forces behind the index are uneven, with AI-related sectors remaining the most important engine. In a client note, Goldman Sachs' Tony Pasquariello stated that if the S&P 500 closes above 7530 points by the end of the year, it will achieve four consecutive years of double-digit gains. This is extremely rare in index history; the last time a similar performance was seen was during the tech bull market of 1995-1999. However, this rally is highly concentrated. Goldman Sachs data shows that the strongest performing sectors this year are primarily AI infrastructure. Related sectors such as memory chips, data centers, and AI semiconductors have significantly outperformed the broader market. This indicates that the market is not experiencing a broad-based rally, but rather is driven by a group of stocks most directly related to AI capital expenditure. This structure has two sides. On the positive side, as long as expectations for AI orders, profits, and capital expenditure continue to materialize, the market will still have upward support. AI infrastructure is not only driving up tech stocks but has also spread to sectors like power equipment, industrials, materials, and data center real estate. On the downside, the more reliant an index is on a few key themes, the more sensitive the market becomes to changes in AI expectations. Goldman Sachs believes that AI remains a core driver of US stock market growth, but it is also a potential source of volatility. If investors continue to believe that AI capital expenditures will translate into profits, the concentrated rally can continue; however, if the market begins to question returns, the most crowded AI infrastructure stocks may be the first to come under pressure, dragging down overall market risk appetite.
Goldman Sachs: US stock market pullback does not necessarily indicate a market top; tech stock weighting is a source of market pressure.
According to Mars Finance, on June 29th, Goldman Sachs strategists stated that this week's weakness in US stocks is more of a structural adjustment dragged down by large-cap tech stocks, rather than a clear signal of a market top. As of Friday afternoon, the S&P 500 index was still likely to fall by more than 1.5% this week. Nevertheless, the macroeconomic backdrop is not entirely negative: oil prices fell by about 10% this week, the 10-year US Treasury yield fell by more than 10 basis points to 4.37%, May core PCE inflation was largely in line with expectations, and Micron's earnings showed that AI-related demand remains resilient. The real drag on the index came from large-cap tech stocks. Goldman Sachs stated that the seven major tech stocks generally fell by 3% to 8% this week, and due to their excessively high market capitalization weighting in the S&P 500, the gains of other components could not offset their drag. At the same time, market breadth improved somewhat, with 8 of the 11 major sectors rising this week, and the equal-weighted S&P 500 outperforming the market capitalization-weighted index year-to-date. This suggests the market may be shifting from a "dominated by a few tech giants" model to a more diversified sector rotation. However, Goldman Sachs also cautions that the AI investment cycle remains one of the biggest risks for investors. Currently, large internet companies are transitioning from an asset-light model to a capital-intensive model. While the market has rewarded this transformation, it is increasingly concerned about the sustainability of AI capital expenditure. The report points out that the market has not yet seen a significant slowdown in AI capital expenditure, although consensus expectations suggest that capital intensity may peak this year or next. Goldman Sachs also states that current AI investment is approaching, and may even exceed, the peak of technology investment in the 1990s. Goldman Sachs' conclusion is not a withdrawal from the market, but rather an advice for investors to continue focusing on assets with upward earnings momentum. This round of correction is more like a release of pressure from a highly concentrated market, rather than a confirmation signal of the end of the bull market.
Multiple Wall Street firms are collectively advocating for "buying on dips" in the semiconductor sector: the long-term logic of AI remains unchanged, but investment is entering an era of selective buying.
According to Mars Finance, on July 7th, amidst the recent continuous correction in the semiconductor sector, several Wall Street institutions have voiced their opinions, generally believing that the current adjustment presents an opportunity for investors to "buy on dips." However, unlike past recommendations to allocate across the entire semiconductor sector, institutions generally believe that AI investment has entered a phase of selective stock picking. Goldman Sachs stated that AI chip trading has entered a more selective phase, and does not recommend continuing to "buy a basket" of semiconductor stocks. They remain optimistic about specific sub-sectors such as CPUs, ASICs, memory, and semiconductor equipment, specifically highlighting AMD and Applied Materials. JPMorgan Chase believes that the recent correction in semiconductor stocks presents a good entry window, as AI chip demand remains in a long-term upward cycle, with new capacity not expected to be significantly released until around 2028, and the industry's supply and demand structure remains healthy. Bank of America maintains its optimistic outlook on the long-term boom cycle of AI semiconductors, believing the industry is still in the middle of an 8- to 10-year growth cycle, and the global semiconductor market size is expected to continue to expand. They recommend focusing on industry leaders such as Nvidia, Broadcom, Lam Research, and KLA. UBS stated that the long-term investment logic for AI remains unchanged, and the short-term fluctuations in the semiconductor sector actually provide long-term investors with opportunities to gradually build positions. They recommend taking advantage of market corrections to buy on dips. Morgan Stanley believes that the long-term prospects for AI chips remain positive, but with the sector's significant rise, the market will focus more on earnings realization capabilities. Funds may gradually rotate from some chip stocks to AI infrastructure beneficiaries such as cloud computing, and investors should pay more attention to individual stock selection. Overall, several Wall Street institutions, including Goldman Sachs, JPMorgan Chase, Bank of America, and UBS, have recently released similar signals: the semiconductor correction is not the end of the AI rally, but rather provides a new window for investment. However, the market has moved from a phase of "broad-based sector gains" to one of "selecting leading companies," and future performance will depend more on companies' earnings realization capabilities and the sustainability of demand for AI infrastructure.
Goldman Sachs: Buy on dips in chip stocks, but avoid "buying a basket of chips" again.
According to Mars Finance, Goldman Sachs stated in its latest report on July 7th that semiconductor stocks still present investment opportunities after the recent pullback, but AI chip trading has entered a more selective phase, and investors should no longer simply buy the entire sector. The bank pointed out that the PHLX Semiconductor Index has risen by over 80% this year, significantly outperforming the S&P 500 and Nasdaq indices. This strong performance has raised the bar for subsequent earnings realization and made the risk-reward ratio more differentiated ahead of the Q2 earnings season. Goldman Sachs remains optimistic about certain sub-sectors, including CPUs, ASICs, memory, and semiconductor equipment. Goldman Sachs believes these areas will benefit more directly from the expansion of AI infrastructure and have relatively higher demand visibility. In terms of individual stocks, Goldman Sachs specifically mentioned AMD and Applied Materials. AMD benefits from server CPU and AI-related demand, while Applied Materials benefits from advanced process technology and memory capital expenditure. However, Goldman Sachs is more cautious about the mobile phone supply chain and some semiconductor companies with high valuations or weak demand.
Goldman Sachs maintains Nvidia's $285 price target, valuation already reflects ASIC market share risk.
According to BlockBeats, on July 7th, Goldman Sachs maintained its "Buy" rating and $285 price target for Nvidia, stating that the stock's current valuation already largely reflects the risk of market share loss due to its self-developed AI chips and increased competition. Nvidia has recently underperformed the broader semiconductor sector. While chip stocks generally rebounded on Monday, Nvidia's gains were limited; year-to-date, its performance has also significantly lagged behind AI hardware companies like Micron, AMD, Intel, and Marvell. The main market concern is that major customers like Alphabet and Amazon are pushing their self-developed ASIC chips to third parties while still purchasing Nvidia GPUs. Meanwhile, increased CPU investment in AI workloads is also giving AMD and Intel more growth opportunities. However, Goldman Sachs analyst James Schneider believes that Nvidia's risk discount is already too large. He expects that even with some market share gained by ASICs and some incremental growth from competitors, Nvidia's revenue could still achieve strong growth next year. The Vera Rubin platform, which will enter mass production in the second half of the year, will be key to determining whether the company can widen the performance gap again.