Goldman Sachs says AI sector remains attractive, with $800 billion in hyperscale investment supporting Asia's hardware chain.

Beating AI News Flash: Timothy Moe, Chief Asia-Pacific Equity Strategist at Goldman Sachs Group, said AI-related stocks remain attractive despite rising government bond yields. Moe said, "We are firmly in the 'higher for longer' camp." He noted that hyperscale cloud computing companies are expected to invest about $800 billion this year, with investment scale potentially reaching about $1.2 trillion by 2027, which will serve as an important signal for demand in Asia's AI hardware supply chain. Moe said the "extremely low" valuation levels in Asian markets also provide additional support for related stocks. Currently, the overall price-to-earnings ratio of Asian stock markets is about 10 times, at a relatively low level within the historical valuation range.

He added that corporate earnings growth will also provide a buffer against the high interest rate environment. For the remainder of this year, Moe expects the market may continue to show a "somewhat bumpy" trajectory as U.S. midterm elections approach, with high energy prices and geopolitical risks adding pressure to the market. However, after this phase ends, he believes the market may see a rally before the end of the year, driven by corporate earnings growth and valuation recovery. (Jinshi)