Goldman Sees Hyperscaler Spending as Continued Boost for Europe Stocks

Summary

Peter Oppenheimer, Goldman Sachs chief global equity strategist, argues that hyperscaler AI infrastructure spending will continue to lift earnings in other sectors and regions, with European equities the main beneficiary due to valuation discounts, resilient profits, and strong cash flows in value areas despite lower tech exposure. He expects moderate index gains in Europe driven by profit growth.

• Hyperscaler capex is driving earnings in infrastructure-related sectors and broader markets outside technology.
• European equities performed as well as the S&P 500 in the first half of the year despite far lower tech weight.
• Europe trades at a valuation discount to other markets even after adjusting for sector composition.
• Profits are holding up, supported by value-oriented areas with strong cash flows and shareholder returns.
• ECB caution and political risks are acknowledged but not seen derailing the European equity story.
• Oppenheimer expects European index gains to be moderate, driven mainly by profit growth rather than multiple expansion.
• Technology sector earnings growth remains solid, but the discussion focuses on the spillover to other regions.