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Goldman Sachs predicts a shift in the stock market as AI infrastructure companies have gained traction in 2024. The focus is now on 'Phase 3' AI stocks, which are expected to leverage AI technology to enhance revenues in 2025. This transition comes as the dominance of the Magnificent Seven tech stocks begins to wane, despite their impressive performance over the past two years.
The Magnificent Seven, including giants like Amazon and Apple, have significantly outperformed the broader market, but their growth may not be sustainable. Goldman Sachs highlights that the next wave of AI beneficiaries will likely see more reasonable valuations and potential for earnings-driven returns. The identified companies are already integrating AI into their operations, positioning themselves for substantial revenue growth.
• Goldman Sachs identifies 11 companies poised for AI-driven revenue growth.
• The Magnificent Seven's dominance in the market is expected to fade.
AI infrastructure refers to the foundational technologies and services that support AI applications, which have seen significant investment in 2024.
Phase 3 AI stocks are companies that are implementing AI to enhance their revenue generation capabilities.
AI-enabled revenue refers to income generated through the application of AI technologies in business operations.
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