Goldman Sachs: will drive 30% increase in profits of S&P 500 companies over 10 years

Who will be the real winners of artificial intelligence?
Since OpenAI's chatbot ChatGPT was developed in 2019, global interest in artificial intelligence has skyrocketed. Many believe that AI technology has the potential to disrupt many people's daily lives.
Under the continuous pressure of the Federal Reserve's rate hikes, the rising cost of corporate borrowing and unresolved supply chain problems make the global macroeconomic outlook grim. Against this backdrop, the AI technology boom has brought confidence to investors, giving them a glimpse of new profit growth drivers.
Snider said, "Many of the favorable factors driving profit expansion appear to be changing, but what is truly optimistic now is that AI is improving productivity."
In a recent macroeconomic research report by Goldman Sachs, it was predicted that the annual growth rate of labor productivity in the United States could increase by nearly 1.5 percentage points within a decade after the widespread popularity of generative AI. At the global economic level, AI is expected to ultimately push global GDP up by an average of 7% per year.
From an investment perspective, "for most investors, it is clear that technology stocks are the direct beneficiaries," said Snider. "But the real question for investors is who will be the winners in the future."
He used the example of the technology bubble in 1999 or 2000, saying that it was difficult to imagine Facebook or Uber changing our way of life at that time.
He suggested that investors should diversify their US stock investments into cyclical and defensive sectors and pointed out that the energy and healthcare sectors offer attractive valuations.

Recently, whether the Federal Reserve will pause rate hikes in June has become a market focus. Multiple Fed officials have spoken about the future of US interest rates, but their statements suggest that there is still some disagreement within the Fed regarding whether they should pause rate hikes in June.
From Ben Snider's perspective, he believes that in the short term, the Fed has almost completed most of its monetary tightening policy. However, he raises the question of how this trend will continue to impact economic development going forward.
Snider says, "During the recent earnings season, there were worrying signs that S&P 500 component stocks began to slightly reduce corporate spending." He notes that the Fed's significant interest rate hikes may be one of the reasons for businesses reducing their spending.
"If interest rates are high, as a company, you may be less willing to issue debt, so you may cut spending. In fact, if we look at stock buybacks for S&P 500 component stocks, in the first quarter of this year, stock buybacks decreased by 20% compared to the same period last year. This could be an indicator that we have yet to see the effects of this tightening cycle."