Wall Street investment bank Goldman Sachs (GS) says that a generational buying opportunity has emerged in U.S. technology stocks.
Peter Oppenheimer, Chief Global Equity Strategist at Goldman, says that technology stocks are in the midst of their worst stretch of performance against the broader market in 50 years.
As a result, investors are now faced with the best opportunity in decades to buy the beaten-down tech sector, writes Oppenheimer in a note to clients.
“The U.S. equity market no longer looks so expensive on a relative basis. Its earnings have remained strong while it has suffered a correction,” writes the analyst.
Concern about capital expenditures on A.I. is the main reason that investors have rotated out of leading technology stocks such as Nvidia (NVDA), Microsoft (MSFT), and Amazon (AMZN).
However, Oppenheimer says that mega-cap technology stocks have been overly punished and that the declines don’t reflect the strong growth rates of the leading names in the sector.
He adds that many leading technology stocks, such as Apple (AAPL) and Alphabet (GOOGL), are now trading at lower multiples than a lot of consumer discretionary stocks.
Lastly, Oppenheimer writes that he isn’t concerned about an A.I. bubble forming, noting that valuations are still lower than what was seen before the 2000 technology bust.
GS stock has risen 86% in the last 12 months to trade at $866.05 U.S. per share.
Related Stories
