Goldman Sachs AI Stocks: Top 5 Stock Picks

In this article, we will be taking a look at Goldman Sachs AI stocks: top 5 stock picks. To read our detailed analysis of the artificial intelligence market, you can go directly to see the Goldman Sachs AI Stocks: Top 10 Stock Picks.

5. Meta Platforms, Inc. (NASDAQ:META)

Goldman Sachs’ Q2 Stake Value: $2.8 billion

Number of Hedge Fund Holders: 225

Meta Platforms, Inc. (NASDAQ:META) is based in Menlo Park, California. It has been actively working with artificial intelligence, including through Meta AI, its AI laboratory, which develops AI and augmented reality technologies.

Wedbush’s Ygal Arounian initiated coverage on Meta Platforms, Inc. (NASDAQ:META) shares with an Outperform rating and a $350 price target on August 22.

In the second quarter, 225 hedge funds were long Meta Platforms, Inc. (NASDAQ:META) with a total stake value of $30.9 billion.

Here’s what Giverny Capital Asset Management, LLC said about Meta Platforms, Inc. (NASDAQ:META) in its second-quarter 2023 investor letter:

“I have believed for a while that we’re better served with a lower weight to the tech giants – we own Alphabet (8.1% of our model portfolio at the end of June) and Meta Platforms, Inc. (NASDAQ:META) (5.2%) for a 13.3% exposure, or about half the Index’s weight in the giants. And while Alphabet’s 36% return for the first half and Meta’s 138% return were gratefully received, I’m pleased to report that if we strip out that contribution to our overall return, the other 23 stocks we own, constituting 85% of our portfolio (with cash making up the balance), were up 10.2% on a weighted basis.

GCAM owns two of the seven tech mega caps in Alphabet and Meta, and they enjoyed similar rises. As mentioned, Alphabet A&C shares rose 36% while Meta rose 138%. Together, they added 2.38 percentage points to the overall Index return, meaning these seven tech giants cumulatively generated 12.4 percentage points of return, or roughly three-quarters of the Index’s return.

Alphabet and Meta combined sport a $2.25 trillion market cap and between them should generate roughly $120 billion of pretax profit this year. That’s a multiple of 19 times pretax profit, a substantial discount to Microsoft and Apple, and an even larger discount to Amazon, Nvidia and Tesla.”