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Goldman Sachs managing director Kash Rangan posits that artificial intelligence will act as a "force multiplier" for the software sector, ushering in a period of rebirth rather than obsolescence. This perspective suggests a significant shift in investor focus from AI hardware to application layers, potentially impacting valuations of public software companies and prompting scrutiny of private AI firms. Goldman Sachs Analyst Bets AI Will Give Software Companies a 'Rebirth' U.S. equities are poised for a notable shift in investment strategy within the technology sector, as a leading voice from Goldman Sachs champions artificial intelligence (AI) as a catalyst for a renaissance in software. Kash Rangan, a managing director at the investment bank, argues that AI will serve as a "force multiplier" for software, contrary to fears of its disruptive potential, ultimately leading to a rebirth of the sector. The Event in Detail: AI as a Force Multiplier for Software Rangan’s thesis suggests that the integration of AI into software will drive unprecedented growth, potentially reversing years of stagnation. He draws a parallel between AI’s current impact and the internet browser’s effect on software in the 1990s, where it expanded the industry significantly. This perspective comes as investors begin to look beyond the initial hype surrounding AI hardware to focus on the application layers where AI can deliver tangible value. In this evolving landscape, Rangan highlights several established SaaS companies as promising investment opportunities, recommending Salesforce (CRM), Intuit (INTU), Adobe (ADBE), and ServiceNow (NOW). These firms, he suggests, are well-positioned to leverage AI to enhance software functionalities, automate complex tasks, and revitalize their offerings. Additionally, Rangan identifies CoreWeave (CRWV) as a speculative, high-leverage bet on the AI infrastructure theme. CoreWeave, which recently debuted on NASDAQ, has seen its shares more than double since its March 2025 initial public offering. The company reported strong performance in Q2 2025, with revenue surging 207% year-over-year to $1.213 billion, marking its first quarter exceeding a billion dollars. A substantial 98% of this revenue stemmed from long-term contracts, contributing to a robust revenue backlog of $30.1 billion. Analysis of Market Reaction and Broader Implications Rangan’s analysis could significantly re-orient investor sentiment, directing focus and capital towards public software companies. This shift is predicated on AI’s ability to make software more intuitive and efficient, generating new monetization avenues and expanding user bases. Goldman Sachs research supports this view, with estimates suggesting generative AI technologies could boost global GDP by 7% over a decade. While optimism surrounding AI is high, Rangan clarifies that concerns about an "AI bubble" are more pertinent to private markets than to established public software firms. Valuations for private AI startups, such as OpenAI and Anthropic, have indeed soared, with OpenAI reportedly boosting its valuation to $500 billion and Anthropic reaching $183 billion through recent funding rounds. These figures underscore intense investor appetite for early-stage AI plays, contrasted with the more mature and financially established public software sector. However, CoreWeave presents a unique blend of hyper-growth and financial risk. The company has aggressively pursued debt financing to fuel its expansion, with total capital commitments now exceeding $25 billion, including a $2.6 billion delayed draw term loan facility in July 2025. This strategy has resulted in a significant debt load of $11 billion against $1.1 billion in cash, incurring high interest expenses, projected at approximately $1 billion annually. Despite its rapid revenue growth, CoreWeave’s valuation has seen some normalization, compressing from over 35x forward sales at IPO to approximately 12x as of September 2025, though this remains elevated compared to the cloud infrastructure sector median of roughly 3x EV/sales. Risks for CoreWeave include customer concentration, with one client accounting for 72% of sales, and the inherent challenges associated with heavy leverage tied to aggressive capital expenditure plans. Expert Commentary > "AI will be a 'force multiplier' for software, not a destroyer," stated Kash Rangan, emphasizing his belief that AI will lead to a software renaissance. His perspective is echoed by Goldman Sachs economists Joseph Briggs and Devesh Kodnani, who highlight how AI breaks down barriers between humans and machines, fostering innovation in software. Marco Argenti, Goldman Sachs' chief information officer, foresees AI evolving into hybrid workers and expert models by 2025, transforming software into intelligent partners. Looking Ahead Investors will be closely monitoring the adoption rates of AI-driven software solutions, with Goldman Sachs projecting accelerated AI investments exceeding 2024 expectations. While the "rebirth" narrative positions software at the forefront of the AI revolution, potential risks remain. Goldman Sachs analysts have previously warned of an "inevitable slowdown" in AI spending, which could pressure stock valuations, potentially leading to a market dip if major tech firms reduce capital expenditures. For companies like CoreWeave, long-term sustainability will depend on improvements in its capital structure and diversification of its customer base. The interplay between innovation, market sentiment, and prudent risk assessment will ultimately define the tech economy's trajectory in the coming years.
Major financial institutions, including Goldman Sachs, T. Rowe Price, BlackRock, and JPMorgan, are significantly expanding their presence in private markets, driven by strategic partnerships, substantial investment allocations, and a recent executive order facilitating 401(k) access to alternative assets. This trend is poised to reshape asset allocation for retirement and wealth investors, though concerns regarding liquidity, fees, and fiduciary responsibilities remain. Financial Institutions Deepen Private Market Engagement Amid Shifting Regulatory Landscape Major financial institutions are increasingly pivoting towards private markets, marking a significant strategic realignment within the asset management industry. This movement is characterized by substantial investments, strategic partnerships, and ambitious growth targets from key players like Goldman Sachs, T. Rowe Price, BlackRock Inc., and JPMorgan. A recent executive order aimed at expanding 401(k) access to alternative assets serves as a critical catalyst, promising to unlock new capital sources and reshape the retirement and wealth management sectors. Strategic Partnerships and Capital Allocations Drive Expansion Goldman Sachs has announced an investment of up to $1 billion in T. Rowe Price, acquiring as much as a 3.5% stake in the asset manager. This partnership is designed to broaden private market access for retail and wealth clients, focusing on integrating private assets, including leveraged buyout and private credit vehicles, into target-date funds and model portfolios. The announcement saw T. Rowe Price shares climb 8% in pre-market trading, reflecting investor optimism for this strategic diversification. David Solomon, Chief Executive of Goldman Sachs, emphasized the synergy, stating, > "With Goldman Sachs' decades of leadership innovating across public and private markets, and T Rowe Price's expertise in active investing, clients can invest confidently in the new opportunities for retirement savings and wealth creation." T. Rowe CEO Rob Sharps echoed this sentiment, highlighting the partnership's ability to "unlock the potential of private capital." Adding to the momentum, BlackRock has outlined an ambitious goal to raise $400 billion in private markets by 2030, aiming to increase its total revenue to $35 billion. The firm has already invested over $28 billion in private markets over the past year, acquiring Global Infrastructure Partners (GIP), data provider Preqin, and HPS Investment Partners to bolster its alternative investment capabilities. BlackRock seeks to double the contribution of private markets and technology to 30% of its total revenue, demonstrating a strategic pivot towards high-growth, high-margin segments. Similarly, JPMorgan has announced an additional $50 billion allocation towards direct lending, building on over $10 billion deployed across more than 100 private credit transactions since 2021. Kevin Foley, global head of Capital Markets at JPMorgan, underscored the firm's commitment, noting, > "We aim to support our clients with products and solutions that best meet their capital structure needs, whether that's a direct or syndicated loan or a bond." Jamie Dimon, Chairman and CEO of JPMorgan Chase, further elaborated, > "Extending this effort provides them with more options and flexibility from a bank they already know and see in their communities, and is known for being there during all market environments." Regulatory Environment Paves Way for Broader Access A significant driver behind this expanded institutional interest is the executive order signed by President Donald Trump on August 7, 2025, titled "Democratizing Access to Alternative Assets for 401(k) Investors." This order aims to broaden access for the approximately 125 million defined contribution (DC) plan participants to alternative assets, which include private market investments, real estate, digital assets, commodities, and infrastructure development projects. In response to this directive, the U.S. Department of Labor (DOL) officially rescinded its 2021 guidance on August 12, 2025, which had previously discouraged fiduciaries from including alternative assets like private equity in 401(k) plans. The new regulatory direction instructs the DOL, in consultation with the Department of the Treasury and the Securities and Exchange Commission (SEC), to reexamine existing guidance under the Employee Retirement Income Security Act of 1974 (ERISA). This move seeks to clarify how fiduciaries can prudently evaluate alternative asset options and potentially issue new rules or "safe harbors" to mitigate fiduciary litigation risk. The scale of this potential shift is substantial: with the 401(k) market holding approximately $12.2 trillion in assets at the end of the first quarter of 2025, market commentators suggest that even a 5% allocation to private equity could result in an inflow of $400 billion. Analysis of Market Implications and Risks Proponents of expanding private market access to retirement portfolios argue that these investments can offer enhanced return potential, reduced volatility, and deeper diversification, historically outperforming public markets despite a higher risk profile. The illiquidity of private markets can also provide strategic flexibility for managers, enabling long-term opportunities without the constraints of public market reporting. However, significant concerns persist regarding the inherent characteristics of private market investments. They are notably illiquid, often requiring holding periods of a decade or more, making them less flexible than traditional mutual funds. This illiquidity poses challenges for participant access to funds and overall plan administration. Furthermore, these investments frequently carry significantly higher fees compared to traditional index funds, which can have expense ratios under 1%. Private equity and private credit investments, for instance, can command management fees of 2% plus performance fees of 20% or more, potentially eroding retirement savings over time. Plan sponsors face considerable fiduciary responsibility in prudently evaluating the investment risk and potential legal and operational implications. The DOL has indicated that private markets may be included as part of diversified, professionally managed investment vehicles, such as target-date funds and managed account programs, rather than as stand-alone investment options. Beyond individual investor portfolios, the broader private credit market, now an estimated $2.5 trillion industry, has attracted increased scrutiny from global regulators. Institutions like the Federal Reserve, the International Monetary Fund (IMF), and the Bank for International Settlements (BIS) have voiced concerns about potential vulnerabilities, including liquidity risks, high leverage, and opaque valuations. These regulators warn that unchecked growth in opaque, illiquid segments of credit markets could amplify systemic shocks, particularly as retail investor participation expands. Looking Ahead The ongoing expansion into private markets by leading financial institutions signifies a transformative period for asset management and retirement planning. While the potential for enhanced returns and diversification is clear, the associated risks, particularly concerning illiquidity, elevated fees, and valuation transparency, necessitate rigorous due diligence and careful consideration by plan sponsors and investors. As regulatory frameworks continue to evolve, the market will closely watch for further guidance from the DOL and SEC. The success of these initiatives will depend on striking a delicate balance between democratizing access to potentially lucrative asset classes and safeguarding the long-term financial security of retirement savers. The intensified competition within the Private Markets sector is also expected to drive further innovation in product development and investment strategies in the coming years.
The market witnessed significant movements driven by advancements in the technology and financial sectors. Broadcom's substantial AI customer announcement spurred a stock rally, while Goldman Sachs initiated a strategic investment in T. Rowe Price, aiming to broaden access to private markets. Concurrently, high-level discussions between tech CEOs and former President Trump focused on the future of AI trade, and mounting concerns regarding Federal Reserve independence added a layer of uncertainty to the economic outlook. Technology Sector Momentum: Broadcom's AI Leadership and Strategic Tech Dialogues The technology sector was a focal point of market activity, highlighted by significant developments from Broadcom Inc. (NASDAQ:AVGO) and high-level engagements between leading tech executives and former President Trump. Broadcom's shares advanced over 9%, reaching a new 52-week high, following the announcement of a new $10 billion customer for custom AI processors. While the customer was not explicitly named, market speculation widely points to OpenAI. This significant deal expands Broadcom's AI-related business backlog to an estimated $30–38 billion through 2027, underscoring the sustained demand for AI hardware. The company reported robust Q3 2025 revenue of $15.95 billion, exceeding consensus estimates, and an EPS of $1.69, surpassing forecasts. AI revenue alone surged 63% year-over-year to $5.2 billion in Q3 2025 and is projected to reach $6.2 billion in Q4 2025, representing a 20% sequential increase. Broadcom maintains a dominant position in custom ASIC chips, controlling an estimated 70–80% of the market, further solidifying its critical role in scaling massive AI clusters. The stock has demonstrated exceptional performance, with a 121% return over the past year and a 44.8% gain year-to-date, significantly outperforming the S&P 500. From a valuation perspective, AVGO trades at a premium, with a 36.9x forward P/E, reflecting its strong positioning in the burgeoning AI landscape. In related developments, chief executives from major tech firms, including Apple (AAPL), Meta Platforms (META), and Alphabet (GOOGL), met with former President Trump to discuss the future of AI trade, economic growth, and U.S. investments. These discussions touched upon potential policy changes, such as the proposed "AI Action Plan," which prioritizes deregulation and streamlining permits for data centers, and an executive order promoting ideological neutrality in federal AI procurement. Major investment pledges followed these meetings, with Google committing $250 billion over the next two years, Microsoft (MSFT) stating $75-$80 billion in annual investments, and Apple adding $100 billion to its domestic manufacturing commitments. The tech-heavy Nasdaq Composite has seen significant AI-driven gains, with NVIDIA Corp. (NVDA) alone adding $1.2 trillion to its market capitalization in six months. Financial Sector Dynamics: Goldman Sachs and T. Rowe Price Form Strategic Alliance The financial services sector also experienced notable strategic shifts, prominently with Goldman Sachs (NYSE:GS) announcing a strategic collaboration and investment in T. Rowe Price (NASDAQ:TROW). Goldman Sachs plans to invest up to $1 billion in T. Rowe Price common stock through open-market purchases, aiming for an ownership stake of approximately 3.5%. This investment signals a strong institutional vote of confidence in T. Rowe Price's long-term strategy and positions Goldman Sachs to potentially become one of its top five largest shareholders. The partnership is designed to offer innovative public-private investment solutions, primarily targeting retirement and wealth investors. This move aligns with a broader industry trend to democratize access to private markets, an asset class traditionally reserved for institutional investors. T. Rowe Price, which has faced asset outflows and a decline in its stock price since its 2021 peak, is expected to receive a timely boost from this alliance. The collaboration will leverage Goldman Sachs' expertise in public and private markets with T. Rowe Price's active investing capabilities and robust retirement-focused distribution network. Key planned offerings include co-branded target-date strategies, multi-asset solutions encompassing private equity and credit, and model portfolios. Following the news, T. Rowe Price stock surged by 6.1%, while Goldman Sachs shares also saw a modest rise of 1.8%. T. Rowe Price's financial metrics, including a trailing Price-to-Earnings (P/E) ratio of 12.43 and a forward P/E of 10.98, suggest an attractive valuation compared to peers like Blackrock (BLK) and Blackstone (BX). However, some analysts maintain a "Hold" rating on TROW shares, suggesting potential downside from current levels. Broader Context and Implications: Federal Reserve Independence Concerns Beyond specific corporate and sector developments, the broader market continues to monitor macroeconomic and political dynamics, with increasing focus on the independence of the Federal Reserve. Concerns regarding the Fed's autonomy have intensified following former President Trump's nomination of Stephen Miran to the Fed's Board of Governors. Miran's dual role as a top economic advisor to the Trump administration and a potential Fed governor has raised critical questions about potential political interference in monetary policy. Financial markets have begun to price in the implications of diminished Fed independence, evidenced by rising Treasury yields, with the 10-year yield reaching 4.283%. This reflects investor apprehension that political influence could compromise the Fed's ability to control inflation. Concurrently, gold, a traditional hedge against inflation and central bank credibility risks, has surged to a record high of $3,536 per ounce. Reports indicate global capital is shifting away from U.S. assets amid fears of policy-driven volatility, mirroring capital flight patterns typically observed in emerging markets. If political interference were to become institutionalized, such volatility could become a new norm, compelling investors to diversify into alternative assets. Cleveland Fed President Beth Hammack has underscored the importance of a measured policy response to recent inflation trends, warning that a politically perceived Fed could weaken its capacity to anchor inflation expectations, potentially leading to a self-fulfilling cycle of higher inflation and increased borrowing costs. Looking Ahead The coming weeks will likely see continued attention on the momentum within the AI sector, driven by ongoing technological advancements and strategic partnerships. The integration of private market assets into broader investment vehicles will also be a key trend to watch in the financial sector. Furthermore, market participants will closely monitor political developments, particularly those that could influence regulatory environments for major tech firms and the perceived independence of the Federal Reserve. Any shifts in these areas could have significant implications for investor sentiment and market direction.
Broadcom's announcement of a new $10 billion AI customer, a strategic investment by Goldman Sachs in T. Rowe Price, and high-profile discussions between technology CEOs and former President Trump marked a period of significant activity across the technology and financial sectors, influencing market sentiment and highlighting evolving policy landscapes. Introduction U.S. equities saw focused activity in the technology and financial sectors following significant corporate announcements and high-level discussions concerning artificial intelligence and economic policy. Key developments include a substantial AI customer announcement by Broadcom (AVGO), a strategic investment by Goldman Sachs (GS) in T. Rowe Price (TROW), and a meeting between major technology CEOs and former President Donald Trump. Broadcom's AI-Driven Advance Broadcom (AVGO) experienced a significant stock advance of +9.86% on September 5, 2025, trading at $336.27. This followed the announcement of robust third-quarter fiscal year 2025 financial results. The company reported record total revenue of $16 billion for fiscal Q3 2025, a 22% increase year-over-year. Consolidated adjusted EBITDA reached $10.7 billion, up 30% year-over-year, reflecting strong operating leverage. AI semiconductor revenue was a significant driver, growing 63% year-over-year to $5.2 billion, marking ten consecutive quarters of robust growth. Infrastructure Software revenue also contributed positively, increasing 17% year-over-year to $6.8 billion. GAAP net income for the third quarter was $4.14 billion, while non-GAAP net income stood at $8.404 billion. Operating income reached a record $10.5 billion, a 32% increase from the prior year. Free cash flow was a record $7.0 billion, representing 44% of revenue and a 47% increase year-over-year. Broadcom secured over $10 billion in orders for AI rigs based on their XPUs, with industry reports indicating OpenAI as the client for this substantial order of custom AI accelerators. These chips are intended for internal use by OpenAI, aiming to boost computing power and reduce reliance on third-party suppliers like Nvidia. Broadcom's strong performance positions it as a leading alternative to Nvidia in the AI chip market. Mizuho raised its price target on AVGO to $355.00 from $320.00, maintaining an Outperform rating, citing strong AI growth outlook. Analysts maintain a robust sentiment, with 33 out of 37 covering analysts assigning a “Strong Buy” rating. However, concerns persist regarding the slow recovery of the non-AI semiconductor segment, with Q3 revenue flat sequentially. Strategic Collaboration in Financial Services Goldman Sachs (GS) announced plans to invest up to $1 billion in T. Rowe Price (TROW) common stock through open-market purchases, aiming to acquire a stake of up to 3.5%. This investment was announced on September 4, 2025. Following the news, T. Rowe Price's (TROW) stock rallied, climbing 8% in pre-market trading to $114.07 and rising 7.02% in Thursday's trading. Goldman Sachs's (GS) stock also saw an increase of 1.8% to 2.5%. The strategic collaboration between Goldman Sachs and T. Rowe Price is designed to develop a comprehensive suite of public and private market investment solutions, primarily targeting retirement and wealth management clients. Key initiatives include the launch of new, co-branded target-date strategies by mid-2026, which will integrate private market investment capabilities, and co-branded model portfolios for mass-affluent and high-net-worth clients. Goldman Sachs will leverage its expertise in private markets, while T. Rowe Price will contribute its established presence in retirement investing and active management capabilities. This partnership aims to expand access to private markets for individuals, aligning with a growing industry trend and recent executive orders. Goldman Sachs Chairman and CEO David Solomon stated: > "This investment and collaboration represent our conviction in a shared legacy of success delivering results for investors." Rob Sharps, Chair, CEO and President of T. Rowe Price, noted the partnership would leverage both firms' capabilities to "unlock the potential of private capital" for retirement and wealth management clients. AI Policy and Tech Sector Engagement CEOs of major technology companies, including Apple (AAPL), Meta (META), and Google (GOOGL), met with former President Donald Trump, where discussions reportedly focused on U.S. investment and the future of AI trade. Trump inquired about investment plans in the United States from these tech leaders. Apple CEO Tim Cook stated Apple would invest $600 billion, crediting Trump for conditions enabling Apple's growth. Meta CEO Mark Zuckerberg also cited $600 billion in investment, while Google CEO Sundar Pichai indicated investments "well north of $100 billion," projected to reach $250 billion in the next two years. This engagement follows Trump's shift in AI policy since returning to the White House, moving the focus from potential risks to economic benefits and affirming a commitment to U.S. AI dominance. An executive order was signed to review and revoke previous AI policies that might hinder innovation. The Federal Reserve's independence is also currently under strain due to political pressures from the Trump administration, impacting investor behavior and asset allocation strategies, suggesting that the broader erosion of central bank autonomy remains a systemic risk for investors. Broader Context and Implications The strong performance of Broadcom underscores the continued strength of the AI boom and its significant impact on the semiconductor industry, drawing increased investor focus on AI-driven growth. The Goldman Sachs and T. Rowe Price partnership highlights a growing trend in the asset management industry to provide individual investors with access to private markets, potentially reshaping the asset management landscape. The high-level discussions between tech CEOs and former President Trump, coupled with shifts in AI policy and concerns regarding the Federal Reserve's independence, introduce an element of political influence into the technology sector and broader economic outlook. The market sentiment is largely bullish on AI-related stocks and companies securing large contracts, while uncertainty persists regarding political influence on tech and AI policy. The financial sector shows a mixed outlook influenced by strategic investment news. Investors will be closely watching for further developments in AI regulation and monetary policy as these dynamics continue to unfold.
The P/E ratio of Goldman Sachs Group Inc is 15.758
Mr. David Solomon is the Chairman of the Board of Goldman Sachs Group Inc, joining the firm since 2017.
The current price of GS is $786.76, it has decreased 0.07% in the last trading day.
Goldman Sachs Group Inc belongs to Financial Services industry and the sector is Financials
Goldman Sachs Group Inc's current market cap is $238.1B
According to wall street analysts, 23 analysts have made analyst ratings for Goldman Sachs Group Inc, including 7 strong buy, 9 buy, 13 hold, 2 sell, and 7 strong sell
Looks like Goldman Sachs is getting a boost from news of a new partnership with T. Rowe Price to offer alternative investments for retirement accounts, which the market is eating up. The stock is showing strong bullish momentum, breaking past previous highs, but some metrics suggest you might want to think twice before aping in at these levels.
Here's the breakdown of what's happening with GS today.
Primary Catalyst: New 401(k) Offerings The main driver for today's move is the announcement that Goldman Sachs and T. Rowe Price will offer new alternative investments, like private equity and credit, for 401(k) retirement accounts by the end of the year. This move taps into a significant market, broadening access for retirement savers and creating a new revenue stream for GS's Asset & Wealth Management division. The market is reacting positively to this strategic expansion.
Technical Signals: Bullish but Overheated? The technicals are strong, but there are signs of short-term exhaustion.
Timeframe | MA (50/200) | RSI (14) | MACD | Signal |
|---|---|---|---|---|
Daily | Above (Golden Cross) | 68.36 | Bullish Crossover | Bullish |
1-Hour | Above MA(20) | 62.10 | Bearish Crossover | Neutral/Slightly Bearish |
Sentiment & On-Chain Insights Sentiment is a mixed bag and points to some potential risks.
The stock has momentum from a solid catalyst, but the heavy insider selling and frothy technicals are serious warnings. Maybe watch this one from the sidelines or check the smart money moves on Edgen Radar before you become exit liquidity.