Goldman Sachs: The major rebound of US stocks led by technology stocks is different from previous bubbles.

Goldman Sachs strategist David Kostin stated in a report that the S&P 500 index has reached record highs driven by a few tech stocks, which is different from past bubbles. The strategist mentioned that stocks with a price-to-sales ratio of over 10 account for 24% of the total market value of the US stock market, compared to 28% in 2021 and 35% during the tech bubble period. However, the strategist added that the breadth of "extreme valuations" is much smaller now, with the number of stocks trading at these multiples significantly lower than the peak in 2021. The strategist said, "This time is different. Unlike the broad 'growth at any cost' trend in 2021, investors are now mostly paying high valuations for the largest growth stocks in the S&P 500 index. We believe that the valuations of the 'Big Seven' US stocks are currently supported by their fundamentals." The "Big Seven" US stocks Apple, Microsoft, Nvidia, Amazon, Meta, Alphabet, and Tesla have driven the S&P 500 index to new historical highs this year, partly due to the boom in artificial intelligence. This increase has led Wall Street strategists to raise their year-end targets for the S&P 500 index over the past two months. Savita Subramanian, head of US equity strategy and quantitative strategy at Bank of America, is the latest strategist to raise her target for the S&P 500 index to the highest level on Wall Street. She currently predicts the S&P 500 index will rise to 5400 points by the end of this year, higher than the previous expectation of 5000 points. She stated that various indicators are flashing bullish signals, indicating that future earnings growth will be stronger and profit margin resilience "surprising". Other strategists like John Stoltzfus from Oppenheimer Asset Management are also dismissing the risks posed by tight positions and technical indicators. John Stoltzfus mentioned in a report that the bullish momentum is being driven by fundamentals, which are "so strong that they cannot be refuted", and reflected in data showing the resilience of corporate, consumer spending, and employment growth. The strategist said, "There may be further room for the stock market to extend its rally this year, and there is a chance to see the stock market climb further beyond the well-known 'wall of worry'."