Amidst a broad-based correction in the semiconductor sector triggered by concerns about the prospects of AI data center construction and a slowdown in capital expenditure, Goldman Sachs believes that some leading companies have shown investment value. In the AI computing field, they favor Nvidia (NVDA) and Broadcom (AVGO), believing that the current share prices of these two companies already reflect expectations of zero earnings growth from 2027 onwards, with the market pricing in future growth rather pessimistically. In the semiconductor equipment sector, the institution expects the global wafer fabrication equipment (WFE) market to maintain benchmark levels in 2027, favoring Applied Materials (AMAT) and Lam Research (LRCX). Meanwhile, European data center construction is expected to maintain steady growth and will not be significantly affected by the US midterm election results. Power producers with existing land, grid connection, and long-term energy supply contracts are expected to benefit from the continued expansion of European data centers.
