Goldman Sachs: AI Trading Reemerges with Deleveraging, Storage and Data Centers Most Attractive

Goldman Sachs believes that this week's market trend is a typical deleveraging scenario, similar to the underlying logic of the sell-off in July. The high-beta momentum portfolio fell 12% this week, while the AI hedge portfolio dropped 10% over five days. Although the leverage level in the AI sector has retreated from extreme highs, inertia capital continues to drive rapid and indiscriminate buying on dips. Goldman Sachs states that AI trading is not over, but the phase of obtaining excess returns through overall sector gains is changing. Currently, it is essential to focus on opportunities where stock prices significantly diverge from earnings per share. The valuation gap in the storage and data center sectors is particularly pronounced, and profit recovery has not yet been fully reflected in stock prices, making them the most tactically attractive. Nvidia's Q2 earnings report and the industry conference in September will serve as subsequent catalysts. Meanwhile, the momentum factor is being readjusted, with software replacing semiconductors as the largest weight in the three-month momentum long portfolio, while the semiconductor and AI complex has entered the short portfolio. Funds are also shifting towards previously overlooked areas such as European and Japanese banks, gold miners, and copper stocks.

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