Goldman Sticks with AI Despite Rising Bond Yields

Goldman Sachs remains optimistic about AI-related stocks despite rising government bond yields. Timothy Moe, head of Asia-Pacific equity strategy at Goldman, points to massive cloud spending as a key support for Asian hardware makers. The largest cloud computing companies are expected to invest around $800 billion this year and potentially rise to $1.2 trillion by 2027.

Moe sees this cloud spending as a demand signal critical for Asian AI hardware supply chains. He notes that corporate earnings growth should provide a buffer against the high-rate environment caused by rising bond yields.

Asian equities trade at roughly 10 times earnings, near the low end of their historical range, which Moe describes as extremely low. This gives the region more room to absorb rate pressure than markets with already stretched valuations.