Goldman Sachs sees AMD as an AI superstar with potential.

U.S. technology stocks are experiencing a remarkable upswing this year, driven by the growing enthusiasm surrounding generative artificial intelligence (AI). This momentum is reminiscent of past technology booms, but according to a study by the investment firm Goldman Sachs, this is not a classic financial bubble. On the contrary, the impressive performance of these companies is rooted in strong financial foundations and promises solid returns for investors in the coming years. However, Peter Oppenheimer, head of global equity strategy at the bank, advises diversification of portfolios to manage risk. Since 2010, technology stocks have contributed significant returns of 32% in global stocks and even 40% in U.S. stocks. A large part of this development is driven by a small group of hyperscale companies that dominate the market thanks to their resource wealth and profitability. The growing confidence in AI technology has further strengthened the stocks of these companies. A look at history shows that new technologies always attract capital and competition. This initially leads to rising valuations, followed by a phase of price decline and market consolidation. Ultimately, only a few companies remain dominant, while innovations grow in secondary technology areas. An example of today’s market leadership in AI is Advanced Micro Devices (AMD). Under the leadership of CEO Lisa Su, AMD has positioned itself as a major player in AI development. Since Su took office in 2014, the stock price has risen from $3 to over $170. This development is mainly attributable to the strategic focus on the manufacturing of processors and graphics units used in laptops, PCs, and now also in AI scenarios. Despite competition from industry giants like NVIDIA, the company sees a promising future ahead. AMD currently ranks tenth on the list of 35 AI superstars created by Goldman Sachs. While the focus on AMD as an emerging AI company is significant, according to an article by Insider Monkey, there are more lucrative investment opportunities, such as cheaper stocks trading at less than five times their earnings.