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Strategies & Market Trends : Technology Stocks & Market Talk With Don Wolanchuk

SOXL 53.91

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Jan 9 4:00 PM EST

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From: threedrives	6/7/2023 8:55:56 AM
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Goldman ES 4700 Goldman Sachs sees a good bit of upside to the S&P 500 ( ^GSPC) as new artificial intelligence technology takes hold inside of Corporate America. "We assume that widespread AI adoption occurs in 10 years and lifts trend real GDP growth by 1.1 percentage point for 10 years. In this scenario, earnings per share in 20 years would be 11% greater than our current assumption and the S&P 500 fair value would be 9% higher than today, holding all else equal," strategist Ryan Hammond wrote in a new client note on Wednesday. The S&P 500 currently stands at 4,290 — Hammond's projection sees the benchmark index rising to around 4,719. Hammond cautions, though, that any earnings lift to companies from AI — and subsequent S&P 500 gain — are hard to measure. He does expect upside either way as companies squeeze out margin-boosting productivity gains from the tech. "However, a wide degree of uncertainty exists around the potential productivity boost and the ability of firms to translate AI into increased profits for 10 years. Based on a range of productivity scenarios, we estimate the benefit to S&P 500 fair value could be as small as +5% vs. current levels and as large as +14%," Hammond added. The poster child for the potential profit impact to companies — and perhaps the inspiration for Hammond's note — is none other than chip king Nvidia ( NVDA).

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