Focusing on the Long-Term Benefits of Artificial Intelligence

In the world of stock investing, it’s important to look beyond the immediate gains and consider the long-term potential. According to Goldman Sachs, investors should shift their focus to companies that are poised to benefit from the adoption of artificial intelligence (AI) in the future, rather than those that have already experienced significant appreciation in their share prices.

Currently, there are several companies that are reaping the rewards of AI in the near term. These include NVIDIA, Meta, Amazon, Salesforce, Marvell Technology, Adobe, Alphabet, ServiceNow, Microsoft Corporation, Intuit, and Credo Technology. On average, these companies have recorded a remarkable return of 66% so far this year. In comparison, the broader market represented by the S&P 500 has seen a year-to-date return of 15%, as noted by David J. Kostin, chief U.S. equity strategist at Goldman Sachs.

However, Kostin emphasizes the importance of seeking out companies that will benefit from AI in the long run. These companies have the potential to increase their earnings per share through higher sales and/or improved margins. In fact, Kostin suggests that the top 1000 companies in the U.S., represented by the Russell 1000 index, could experience a median increase of 19% in their earnings per share thanks to AI.

To provide investors with valuable insights, Kostin has compiled a list of 50 companies across various sectors that are expected to be long-term beneficiaries of AI. These sectors include communication services, consumer discretionary, energy, financials, and information technology. These companies have the potential to witness a significant increase in their baseline earnings, with some expected to see a boost of up to 388% with the help of AI.

The future of AI is promising, and stock investors would be wise to consider companies that will thrive in this evolving landscape. By focusing on the long-term benefits of AI, investors can position themselves for success and capitalize on the opportunities that lie ahead.

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