Goldman Sachs Says Capital Spending Is Powering the Bull Market

Summary

Goldman Sachs Chief Global Equity Strategist Peter Oppenheimer argues that a broad-based increase in capital spending—driven by AI commercialization and government infrastructure programs—is powering the bull market. He expects earnings to keep driving equities higher in the second half, with chip/memory stocks and infrastructure companies as key beneficiaries. He also sees a multi-year CapEx cycle boosting industrial, defense and energy sectors, while maintaining a positive but cautious view on the explosive KOSPI rally.

• Global equities should see reasonable gains in H2, driven by nominal GDP and CapEx.
• AI-related capital spending directly benefits semiconductor and memory companies.
• Infrastructure firms supporting AI buildout are also seeing stronger earnings.
• Government spending on infrastructure, energy, and defense is creating a multi-year CapEx cycle.
• Retail investor participation in the US is high, posing a correction risk if speculation grows.
• South Korea's KOSPI has surged on chip/memory dominance; Goldman stays positive but expects slower gains.
• Overall market outlook remains constructive with broadening earnings growth across regions.