Goldman Sachs: Strong performance by tech giants boosts confidence, recent pullback provides a good opportunity to buy into the US AI sector.

Analysts at Goldman Sachs Group, Inc. stated that in the last month, some large technology companies involved in the field of artificial intelligence (AI) released financial reports that were better than expected, indicating that investors have the opportunity to reposition themselves in this sector after a recent downturn. The AI sector, which has driven the market up in the past two years, has been underperforming since entering 2025. The emergence of DeepSeek in January of this year has raised doubts about the necessity for U.S. companies to invest billions of dollars in building AI systems, leading to a sharp decline in chip manufacturers and AI-related stocks. Furthermore, the trade war initiated by U.S. President Trump in recent times has sparked concerns about a slowdown or even recession in the U.S. economy. However, the financial reports released by tech giants like Alphabet (GOOGL.US), Microsoft Corporation (MSFT.US), Meta (META.US), have improved market sentiment. Alphabet's financial report shows strong profit margins despite concerns about AI spending. Microsoft Corporation's financial report demonstrates good execution and sustained demand signals in an uncertain environment. Goldman Sachs Group, Inc. analyst Louis Miller stated in a report, "It can be said that the current market is very pessimistic about the AI theme. We believe that this is an opportunity to buy the AI sector on dips." Louis Miller further stated, "Currently, the valuations of all AI-related stocks are lower than they were at the beginning of the year and last year. From a long-term profit perspective, the valuations of various AI stocks are cheaper than during the previous AI boom, approaching levels seen before the advent of ChatGPT (except for software, which is generally more sensitive to interest rates)." "Based on the performance and profitability of our 'broad AI stock basket,' these stocks are still cheap, with profits remaining robust." It is reported that Goldman Sachs Group, Inc.'s U.S. TMT AI basket includes companies devoted to developing artificial intelligence or driving the implementation of new technologies. Last summer, this basket of stocks underperformed the market by 19% due to concerns about investment returns, then rebounded to a high in January. Since 2025, these stocks in the basket have fallen by over 20% due to the impact of DeepSeek and the Trump trade war, but have partially regained lost ground in the past two weeks. Additionally, Goldman Sachs Group, Inc.'s report points out that overall market sentiment is improving, and "tariff risk factors are gradually being absorbed." Analysts expect that the next month's economic data will not show significant impacts from tariffs and anticipate that U.S. consumers will continue to spend, unless prices rise significantly or unemployment rates increase, which are not expected to occur in the short term.