TipRanks
Goldman Sachs Bets on These 3 Stocks; Sees Over 50% Upside Potential
What goes up must come down, as we all know. This fact of physics is the underlying worry of the stock market, that fuels our suspicions of bubbles. But investment firm Goldman Sachs doesn’t believe we should worry; the firm’s chief global equity strategist Peter Oppenheimer gives several reasons to expect that the market’s current upward trend is real. His key points include the equity risk premium, the real profits realized by the Big Tech giants, and the high savings rate of US households coming out of the COVID pandemic. Taking these points one at a time, Oppenheimer notes that in today’s regime of record-low interest rates, higher-risk stocks offer a premium; that is, their potential returns are far higher than safe bonds, and justify the added risk factor. On the second point, the giants of the tech industry represent a massive concentration of capital and wealth in just a few companies (Facebook, Apple, Amazon, Microsoft, and Google); but these companies built that concentration through strong fundamentals and real profit growth, rather than bubble inflation. And finally, on the point of savings, the decline in overall economic activity during the pandemic period has left US households with some $1.5 trillion in accumulated savings – which can be used for retail stock investing. Taking Oppenheimer’s outlook and turning it into concrete recommendations, the pros at Goldman Sachs…
