Even though investors worried last year that hyperscalers’ capital spending on AI was becoming longer, Goldman Sachs says this ramp-up in spending is only just beginning.
“The capital spending supercycle is taking hold,” Peter Oppenheimer, the bank’s chief global equity strategist, said in a client note on Tuesday.
Hyperscalers are expected to spend $757 billion this year, an 84% increase from last year, and another $920 billion in 2027, the bank said.
The bank said that overspending has significantly boosted revenues for companies that stand to benefit from building AI, which is worth as much as gold in the current market environment.
“In an environment where the cost of capital is high and multiple expansions are more limited, this combination of earnings growth and positive revisions remains a key driver of outperformance,” Oppenheimer said.
To take advantage of ongoing trends, the bank has listed dozens of stocks around the world that are beneficiaries of capital expenditures, as judged by their correlation with sales performance and global spending rates.
Below are 16 stocks in the U.S. tech sector, their industry groups, market capitalizations, and expected price-to-earnings ratios over the next 12 months.