nvidia gets goldman sachs's nod amid market worries
new york, Sunday, 9 March 2025.
Amidst economic uncertainties, Goldman Sachs includes nvidia on its ‘compelling stocks’ list. The investment firm is confident in nvidia’s robust market presence. They cite the company’s high growth potential within the artificial intelligence sector and data centers. This could signal a positive shift for nvda’s stock performance, despite current market anxieties. Nvidia’s stock has retreated 17% in 2025.
shifting ai focus
Goldman Sachs suggests a shift in focus from AI infrastructure stocks to AI-enabled software stocks [2][3]. According to Goldman Sachs analyst Ryan Hammond, AI stocks with AI-enabled revenues present a better risk/reward balance for new investments compared to those heavily involved in AI infrastructure [2]. This perspective comes as the AI sector faces volatility due to macroeconomic and microeconomic factors [2]. The announcement of DeepSeek, which released a powerful AI training model, also catalyzed a sharp rotation away from Nvidia [2].
market performance and challenges
Nvidia is experiencing a downturn, with its stock having retreated 17% in 2025 [2]. The broader Philadelphia Semiconductor index has also seen a decline, dropping nearly 15% since mid-February [3]. This reflects wider concerns about capital spending on AI infrastructure and increasing competition [3]. Goldman Sachs believes a reversal in these rotations requires either improved economic data or a change in market positioning. Easing tariff policies could also benefit the equity market, but uncertainty around this remains high [3].
software stocks as alternative
Amid the struggles of AI infrastructure and hardware manufacturers, Goldman Sachs points to opportunities in AI software stocks [3]. They anticipate that the AI market will eventually shift towards ‘inferencing,’ which involves running AI applications [2]. Software companies, including Salesforce, are increasingly adopting autonomous, goal-driven AI agents [2]. Goldman Sachs expects robust sales growth between 2024 and 2026 for software companies like Palantir Technologies, Cloudflare, and SentinelOne [3].