Goldman Sachs Predicts Top Investment Opportunities for Next Year

TL/DR –

Goldman Sachs Asset Management believes that some of the best investment opportunities in 2022 may not be related to the AI trade. The company claims that the market’s future looks strong for risk assets, boosted by the Federal Reserve’s ongoing interest rate cuts. Goldman Sachs suggests three areas for potential investment: small-cap companies, which are driving innovation and have attractive valuations compared to their larger counterparts; healthcare stocks, which are already benefitting from the AI rally; and international stocks, which are predicted to outperform the US equity market over the next decade.

2022 Investment Opportunities Beyond AI Trade

Goldman Sachs Asset Management suggests that 2022’s best investment opportunities may not be found in the AI trade. In fact, other areas of the market stand to benefit as the rally in mega-cap tech expands, according to Greg Calnon, the cohead of public investing at the bank’s asset management arm.

Market outlooks look positive towards risk assets in 2022, with tailwinds such as the Fed’s ongoing interest rate cuts. This shift has already started to favor less popular market sectors. Here are some of Goldman Sachs’ top investment ideas for the coming year.

1. Small Caps

Despite the significant attention on hyperscalers, small-cap companies are at the forefront of the AI boom. Many small firms are well-positioned to compete in niche markets, not aiming to compete directly with the largest AI trade spenders.

2. Healthcare Stocks

Healthcare is one sector benefiting from AI hype. The iShares US Healthcare ETF is up 14.5% year-to-date, indicating a broadening rally.

3. International Stocks

International stocks have outperformed US equity in 2022. The Vanguard Total International Stock Index Fund ETF is up 26.8% year-to-date. Goldman Sachs predicts that international stocks will outpace US stocks over the next decade.

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