Goldman Sachs Sees Excessive Caution in Asian AI Trade Sentiment

Asian investors are exhibiting excessive caution towards AI trades following a severe setback in July, according to Goldman Sachs.

The historic plunge in momentum stocks left a 'trauma' among Asian investors, but Goldman Sachs believes that current market caution has become excessive.

According to data from Goldman Sachs Prime Brokerage, institutional leverage ratios and holdings have fallen to year-to-date lows, while S&P 500 Q2 earnings per share surged 30% year-over-year.

Flood noted that American investors may be underestimating the adoption speed of China's open-source AI models, while Asian investors may be overestimating it, with the final outcome likely falling somewhere in between.