Goldman Sachs' Phase 2 AI Stocks: In the Spotlight of Innovation

In a typically insightful analysis for investment banks, Goldman Sachs has compiled a list of leading Phase-2 AI stocks. Among the standout companies is Credo Technology Group, which provides essential network infrastructure for data centers. Its placement on the list is based on its strong performance and potential for substantial growth. After technology stocks surged following the recent pandemic, major tech stocks continued to show robust performance despite rising interest rates. The market has recognized these stocks as leaders and innovators in the field of artificial intelligence (AI), which explains their ongoing popularity. This is also reflected in the impressive returns of the "AI darlings of Wall Street," with certain stocks experiencing astronomical increases of up to 1100% within a year. The pervasive nature of AI has permeated various industries and led to innovative developments beyond the realm of graphics processing units (GPUs). Elements such as data centers, networking equipment, and energy supply play central roles. Consulting firms predict an increasing energy burden from the expansion of more AI data centers, requiring significant investments. A detailed look at Goldman Sachs' report reveals that the AI industry has been divided into different categories: from established market leaders to capacity providers, users, and beneficiaries of the technology. The returns of these groups vary, with the benefits of utilities particularly standing out in recent investment trends. These developments underscore the overall excitement in the AI sector and continue to create new investment opportunities. Forward-looking revenue expectations are also reflected in the estimates. Goldman predicts that semiconductor companies and AI hardware providers will significantly increase their revenues by 2025 compared to 2019. Investors are seeking such growth opportunities, with some hoping that other companies will achieve similarly breathtaking stock returns.