Wall Street banks remain optimistic about AI’s potential applications and are busy gaming out which corners of the stock market stand to benefit. Strategists at Goldman Sachs, for example, foresee a large jump in the earnings per-share of the companies it’s tracking that may gain most from the new technology.
According to Chronert, the release of first-quarter earnings prompted a rush into anything AI related after revealing how a handful of the biggest companies, like Microsoft and Amazon.com, were planning to deploy it. In the second quarter, however, the attention shifted to how the impact will be felt more broadly — setting the stage for it to start cropping up in a wider array of stock prices.
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Chronert upgraded his year-end target on the S&P 500 to 4600 from 4000 a couple of months ago on expectations for earnings growth next year and rising optimism that the Fed can engineer a soft landing for the US economy, while admitting that the bank failed to foresee the surge in tech stocks. The S&P 500 closed at a little over 4400 on Friday.
Bloomberg