Global Courant
Goldman Sachs is bullish on generative artificial intelligence: It expects it to move up the broader S&P 500 — and one specific corner of technology. An AI-driven rally has already taken the S&P 500 to highs this year, but Goldman predicts there will be more increases. “We believe there is even more upside for the S&P 500 index level if investors factor in a potential productivity and earnings boost from AI adoption,” Goldman analysts wrote in a June 6 note. It has new estimates: Based on its analysis that widespread adoption of AI would boost productivity growth by 1.5 percentage points per year over a 10-year period, Goldman expects the CAGR (compound annual growth rate) of the S & P 500 would be 5.4%, higher than the current estimate of 4.9%. That would push the fair value of the S&P 500 to 9% above current levels, Goldman said. But there are caveats: Productivity scenarios can differ, which Goldman says could lead to real value gains that could range from 5% to 14%. For example, policy responses, such as a higher corporate tax rate, can negate any increase in earnings, or higher interest rates can negate increases in the fair value of the S&P 500. Stockpicks AI servers are one part of the market that Goldman is optimistic about. Thanks to the demand for generative AI, the supply of AI server equipment is likely to see a boost in the coming years, Goldman Sachs said in a separate report on June 1. Currently, there are about 150,000 units of generative-related AI server shipment this year — about 1% of total server shipment, according to the bank. The number of units could grow by about 75% by 2024. The new type of AI server designed for generative AI applications can hold eight graphics processing units, more than the zero to two for typical servers, according to Goldman. The bank said that within the industry, server printed circuit board (PCB) supplier Gold Circuit Electronics should benefit the most from the generative AI server investment opportunity, giving it an increased price target of TWD 140 ($4.50), or nearly 5% upside down. It added that Taiwan’s suppliers of copper clad laminate – a material used for electronic circuits – and PCBs should also benefit. It named buy-rated Unimicron, giving it a price target of TWD 235, or an upside of about 33%, as well as Kinsus (target price of TWD 180, or 55% upside), Taiwan Union Technology (target price of TWD 93, or up about 33%). , or 22% increase) and Elan Microelectronics (price target of TWD 250, or 141% increase). – CNBC’s Michael Bloom contributed to this report.
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