Goldman Sachs says a multitrillion-dollar wave of AI infrastructure spending could be the catalyst that spreads gains beyond the market’s largest tech names.
In a CNBC interview, Goldman’s chief US equity strategist, David Kostin, points to Nvidia’s latest forecast for industry capital spending through the end of the decade and ties it to how stock market leadership could broaden.
“Goldman Sachs tech conference in San Francisco, NVIDIA commented about the idea of $3 trillion, T with a trillion, capital spending that they anticipate over the next several years from now to 2030. So that would be a tailwind to the extent that that would be maintained, all that capital spending. Now, that is a source of some risk if it decelerates.”
He also underscores the market’s narrow leadership, calling it a “unique risk.”
“Seven stocks, for example, are something in the vicinity of around a third of the S&P 500 market cap. So that definitely introduces a unique risk to the market.”
Kostin warns that the Magnificent 7 cannot carry the US stock market for too long. He points out that the $3 trillion AI capex could determine whether the Mag 7 would “catch down” with the rest of the market.
“The concentration historically does not persist forever. And the idea is that you get a catch-up, where lower multiple broadening of the market rises, or do you have a catch-down, where some of those biggest stocks come down?
I think the catalyst for the catch-down potentially would be a deceleration in the amount of capex that you emphasize, and the broadening of the market would be more consistent with our view in terms of economic activity, more companies participating in an economic expansion that’s continuing at a still below trend rate right now, but likely to go back towards trend in 2026.”
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