The early winners in artificial intelligence have strong fundamentals and less extreme valuations compared with stocks seen in previous periods of exuberance, according to Goldman Sachs strategists, rebutting concern that a bubble is building in AI.
“We believe we are still in the relatively early stages of a new technology cycle that is likely to lead to further outperformance,” Goldman strategists led by Peter Oppenheimer wrote in a note titled Why AI Is Not a Bubble. Stocks leading the AI rally trade at significantly lower levels than the biggest firms during past tech bubbles, Oppenheimer said, and today’s companies are already profitable and generate cash.
