What is Goldman Sachs' new strategy for software stocks amid AI concerns?

Goldman Sachs has introduced a custom basket strategy that goes long on companies with AI-resistant business models and shorts those with workflows susceptible to AI automation.

How has AI anxiety impacted software stock valuations?

Anxiety over AI has led to a significant reset in software stock valuations, with price-to-earnings ratios dropping from about 51 times earnings a year ago to approximately 27 times earnings currently.

What types of companies does Goldman Sachs favor in its AI disruption basket?

Goldman Sachs favors companies whose businesses require physical execution, regulatory entrenchment, or human accountability, and those that stand to benefit from AI adoption like compute and data infrastructure providers.

Home / Business and Economy / Goldman Sachs Bets on AI-Proof Software Stocks

Goldman Sachs Bets on AI-Proof Software Stocks

14 Feb

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Summary

Goldman Sachs launched a custom basket to navigate AI disruption.
It favors companies with AI-resistant business models.
The basket is long AI beneficiaries and short automatable workflows.

Goldman Sachs Bets on AI-Proof Software Stocks

Goldman Sachs Group Inc. has launched a custom basket strategy to help investors navigate the increasing disruption posed by artificial intelligence in the software sector. The firm is positioning the basket to benefit from companies perceived as more resilient to AI's capabilities.

The strategy involves a pair trade: going long on software companies whose business models are considered difficult for AI to replicate, due to factors like physical execution requirements or regulatory entrenchment. Simultaneously, it shorts companies whose workflows are seen as more susceptible to automation or in-house replication by AI.