The CEO of banking titan Goldman Sachs says three forces are converging to create a favorable backdrop for two investment plays.
In an a16z interview, David Solomon says fiscal, monetary and regulatory forces are hitting the US economy at the same time.
He highlights that the AI boom is acting as a tailwind, with Big Tech spending hundreds of billions of dollars to finance the data center buildout.
“We have fiscal stimulus. We have monetary stimulus because we’re in a rate-cutting cycle. That doesn’t mean I think we’re going to see many more rate cuts, but we’re probably going to see a couple more.
We are in a capital investment super cycle, like something we’ve never seen. Last year, the four largest companies contributed 1% to GDP growth with their $400 billion in spending.
We are in a deregulatory unwind cycle from a massive regulatory surge during the last administration to a deregulatory windback. That is very stimulative. All these things are just such a cocktail of stimulus that it’s very, very hard to slow the economy down.”
While Solomon has a rosy outlook on the US economy, he notes that consumers are falling behind, as they struggle to keep up with rising prices. The Goldman executive names two investment plays that can help relieve the pressure on consumers.
“If you’re around growth and technology, this is a pretty prime environment.”
Last week, Solomon said that he sees AI boosting the economy as companies adopt the technology. He believes that while adoption and deployment within Corporate America may be gradual, AI-driven productivity gains are a “real thing.”
But he warned that the breakneck speed of AI could shock the labor market.
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