Goldman Sachs Remains Optimistic on AI Amid Rising Bond Yields

Goldman Sachs continues to express confidence in AI-related stocks despite the recent rise in government bond yields. Timothy Moe, the bank's head of Asia-Pacific equity strategy, highlighted significant cloud spending as a crucial support for the region's AI hardware supply chain. He noted that major cloud computing companies are projected to invest approximately $800 billion this year, with expectations of this figure reaching around $1.2 trillion by 2027, which serves as a vital demand signal for Asian manufacturers of AI hardware.

The comments come as global bond yields have surged, testing investor appetite for growth stocks. Long-dated Treasury yields in the United States have recently climbed to their highest levels in nearly two decades, increasing the discount rate on future earnings and exerting pressure on high-valuation sectors. However, Moe argued that corporate earnings growth could provide a buffer against this high-rate environment, and Asian equities currently trade at about 10 times earnings, near the lower end of their historical range, allowing for more resilience against rate pressures.

Moe anticipates volatility in the markets leading up to the U.S. midterm elections in early November, compounded by high energy prices and geopolitical risks. Nevertheless, he predicts a potential rally towards the end of the year, driven by earnings growth and a recovery in valuations. This perspective aligns with a broader consensus among major banks, which are increasingly viewing the AI investment cycle as ongoing, rather than concluding, despite the challenges posed by rising bond yields.

© 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source: KLEA News