Goldman Sachs Boosts Networking Sector Outlook Amid AI Demand Surge

Goldman Sachs has updated its networking sector outlook in response to increasing demand for artificial intelligence (AI) and network modernization. According to a recent report, Goldman Sachs' industry model has been revised to reflect new data from 650 Group, which predicts the AI Ethernet data center switching market will reach $100 billion by 2030, growing at a compound annual growth rate of 65% from 2025 to 2030.

The upgraded campus spending outlooks were driven primarily by higher WiFi 7 estimates and increased network modernization needs. Goldman Sachs also attributed the partial impact of memory price increases on the upgrade. In contrast, F5 Networks reported impressive fiscal third-quarter 2026 results, beating analyst projections with adjusted earnings of $4.73 per share and revenue of $865 million.

RBC Capital and Piper Sandler raised their price targets for F5 Networks to $508 and $461 respectively, citing the company's growth in multi-cloud adoption and demand driven by AI and platformization. However, BofA Securities maintained an Underperform rating, expressing concerns over moderation despite the strong Systems growth.