Goldman Sachs Recommends Platform Stocks for Next AI Investment Wave

As enthusiasm for AI investment rebounds after a summer slowdown, Goldman Sachs analysts are pointing investors toward a new set of stocks poised to benefit from the next wave of capital flowing into the AI sector. While companies like Nvidia have dominated the AI infrastructure space, analysts now recommend focusing on "platform" stocks, which are expected to be the primary beneficiaries of AI’s next growth phase.

Platform Stocks to Watch

According to a note released Thursday, Goldman Sachs analysts advise looking beyond Nvidia and other AI infrastructure firms. Instead, they recommend platform stocks that will facilitate the development and application of AI technologies, which could see significant gains in the coming investment wave. These platforms include companies like Microsoft, DataDog, MongoDB, Elastic, and Snowflake, which are building AI-integrated applications designed to support widespread AI adoption.

Why Platform Stocks Are Key

Goldman Sachs analysts argue that platform companies are well-positioned to capitalize on AI’s growth because they provide essential tools—such as databases and development frameworks—that enable the construction of next-generation AI applications. While these stocks have experienced declines this year due to short-term challenges, they are trading at historically low valuations, which could set them up for strong returns as AI investment gains momentum again.

AI Investment Shifts Beyond Infrastructure

Although Nvidia and other AI infrastructure companies, such as semiconductor manufacturers and cloud providers, are expected to continue performing well, Goldman Sachs cautions that their future returns may be more moderate. Analysts believe that elevated valuations for infrastructure stocks could limit the potential for significant future gains, making platform stocks a more attractive option for investors seeking growth in the AI sector.

Timing of AI Monetization Still Uncertain

Goldman Sachs analysts also note that while platform stocks have clear potential to monetize AI through incremental revenue generation, the broader impact of AI on other industries may take longer to materialize. Stocks in the "Phase 3" category—those expected to generate AI-related revenue in software and IT services—are key to building investor confidence in AI. However, companies in the "Phase 4" group, which are poised to benefit from widespread AI adoption, may not see meaningful returns for several years.

AI Investment Rebounds After Summer Slowdown

The analysts’ recommendations follow a summer dip in AI stock investments, which led to underperformance in July and early August. Nvidia, for example, dropped as much as 27% from its peak in June but has since recovered, trading near record highs again. This renewed interest in AI stocks has been driven by factors such as interest rate cuts by the Federal Reserve and improving macroeconomic data.

What This Means for the AI Industry

The shift in focus to platform stocks reflects a broader trend in the AI industry: the transition from infrastructure-building to practical AI applications. As AI matures, the real value will come from companies that empower widespread adoption by providing essential tools and platforms for developing AI-driven solutions. This marks a pivotal moment where the industry moves from foundational technologies, like semiconductors, to scalable platforms capable of enabling real-world AI use cases. Investors are recognizing that the next wave of AI growth will be driven by these platform companies, setting the stage for more advanced, everyday AI integrations across sectors.