Broadcom: Rise Among the AI Superstars According to Goldman Sachs

The technological surge of U.S. technology stocks this year can largely be attributed to the growing enthusiasm for generative artificial intelligence (AI). However, investment bank Goldman Sachs does not see this as a sign of a financial bubble, but rather as a solid foundation for further returns. The bank points to a variety of smaller technology companies and non-technology sectors making waves alongside the well-known market leaders. Peter Oppenheimer, Chief Strategist for Global Equities at Goldman Sachs, nonetheless recommends careful diversification to minimize risks. Since 2010, the technology sector has contributed a full 32% of global and 40% of U.S. stock returns, supported by strong financial fundamentals. Since the 2008 financial crisis, earnings per share have grown impressively by 400%. In particular, hyperscale companies in the software and cloud computing sectors have dominated the market with their high profits and resources. Despite rapid developments in AI, observers see parallels to the past, where rapid technological innovations always attracted capital and were highly competitive. A phase often ensues in which prices stabilize and consolidations occur. A notable example is Broadcom, which supplies semiconductor and software solutions and recently experienced a profit surge. This development was fueled by a nearly 21% increase in semiconductor sales year-on-year in August. John Neuffer of the Semiconductor Industry Association emphasized the robust growth, particularly in the American markets. With a company valuation of over $825 billion and a position among the "Magnificent Seven," Broadcom is now considered one of the market giants. This group includes the world's largest companies, with Broadcom having recently surpassed the California carmaker Tesla. Within the AI hopefuls list compiled by Goldman Sachs, Broadcom ranks eighth. Despite its potential, analysts suggest that there are more promising alternatives for investors hoping for more attractive returns.