Goldman Sachs: AI Trading Recreates July Deleveraging, Storage and Data Center Sector Most Attractive

BlockBeats News, August 23rd, Goldman Sachs believes that the market trend this week is a typical deleveraging event, similar to the underlying logic of the July sell-off. Goldman's high-beta momentum portfolio fell 12% this week, while the AI hedge fund portfolio dropped 10% over five days. Despite the AI sector's leverage levels receding from extreme highs, inertia funds are still driving rapid and indiscriminate buying on dips.

Goldman Sachs stated that AI trading is not over, but the phase of earning excess returns relying on the overall sector uptrend is changing. It is now crucial to focus on opportunities where stock prices significantly deviate from earnings per share. Among them, the storage and data center sector exhibits the most significant valuation gap, with earnings recovery yet to be fully reflected in stock prices, making it the most tactically attractive. NVIDIA's second-quarter earnings report and the September industry conference will serve as upcoming catalysts.

Meanwhile, the momentum factor is undergoing a reset, with software surpassing semiconductors as the largest weight in the three-month momentum long portfolio, while semiconductors and AI composites enter the short portfolio. Goldman Sachs mentioned that funds are also shifting towards previously overlooked areas such as European and Japanese banks, gold miners, and copper miners.