Goldman Sachs Favors AI Infrastructure Over Treasuries Despite Higher Interest Rates

A Goldman Sachs executive has expressed his preference for AI infrastructure over long-dated Treasuries.

Anshul Sehgal, global co-head of fixed income, currencies, and commodities, said he favors AI infrastructure companies, including neocloud providers that rent AI computing power and data centers.

He made these comments after the Federal Reserve raised interest rates last week and signaled another hike could come later this year. This has extended a selloff in Treasurys, sending long-term yields to their highest levels in more than two decades.

Sehgal sees more upside in AI infrastructure than long-dated Treasurys, noting that higher interest payments have put more money in the hands of savers who have in turn financed AI infrastructure investment. He said bond yields could fall modestly from current levels, but AI investments 'can go up multiplicatively.'