Goldman Sachs is striking a bullish tone on technology stocks as investors weigh whether the artificial intelligence boom can sustain its momentum into year-end.
Speaking at the Goldman Sachs Communicopia and Technology Conference, Peter Callahan, Goldman’s US technology, media, and telecommunications sector specialist, says optimism across indices and enterprise spending remains high despite months of volatility.
“I mean, it’s upbeat, right? Indices, tech indices broadly at the highs. We’ve climbed a lot of wall of worries over the last four or five months. I’m thinking things like tariffs. I’m thinking things about the sustainability of AI investment. And so as we kind of hit the final third of the year, tech optimism remains.”
Callahan adds that valuations remain “elevated, but not extreme,” underscoring the view that investor positioning has not yet tipped into irrational exuberance. Amid the investor enthusiasm, Callahan says he’s bullish on tech.
“Big leadership to start the year from large-cap tech. Over the last month, you’ve seen mid-cap tech really start to catch up and outperform large-cap tech. So it’ll be something I’ll be continuing to watch down the stretch of the year.”
He also identifies an under-the-radar tech subsector that could rally during the final months of the year.
“I don’t subscribe to the view that software is, quote unquote, dead. And so it does feel like software may have bottomed out over the summer. And similar to that kind of small-cap comment we talked about, that may be an area to watch the upside down the stretch of the year.”
Earlier this week, SoFi’s head of investment strategy, Liz Thomas, predicted that the AI trade will rotate to software.
“Well, so earlier this year, when I came out with my 2025 outlook, I talked about software being the next conduit, mostly in the semiconductor space. So if you think about AI as a longer-term theme, and themes being somewhere between let’s say three, five, or even 10 years long, we’ve still got a big runway in a lot of these other names that have not really benefited yet from the theme as much as semis have.”
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