Goldman Sachs stays selectively constructive on synthetic intelligence infrastructure builders heading into the brand new yr. In a be aware printed earlier in December, the Wall Avenue funding financial institution cited continued momentum in underlying AI infrastructure demand as a catalyst in 2025. “We anticipate demand for AI information heart gear to stay sturdy in 2025/26, benefiting each those that promote into hyperscalers (ANET, CSCO, JNPR) and in addition to tier 2 cloud/enterprise (CSCO, DELL, HPE, SMCI, PENG),” analysts led by Michael Ng wrote within the 53-page report. In a extra cyclical a part of the {hardware} and software program sector, Goldman listed data know-how distributors as an space that appears enticing. The agency expects each the PC and campus networking markets to renew rising and get better in 2025. “Regardless of the miss in 2024, we imagine underlying drivers of a PC refresh in 2025 are nonetheless intact together with the growing old PC put in base, Home windows 10 end-of-support and demand for AI-capable PCs,” the analysts wrote. Within the be aware, Goldman shared its high inventory picks for the house heading into 2025, as seen under: Dell Applied sciences has surged 53% in 2024, however Goldman believes there’s nonetheless extra upside forward for the PC producer. The financial institution’s 12-month worth goal of $165 is roughly 38% above the place shares closed on Thursday. Equally, Goldman is bullish on Arista Networks , which is up 91% this yr. The financial institution’s $120 worth goal represents one other 4% upside within the inventory. “We’re selectively constructive on ANET and DELL as beneficiaries of the AI infrastructure demand due to their early market share management in AI servers and switching,” Goldman wrote, including that each names ought to ship sturdy returns going ahead. Goldman additionally cited Penguin Options as a beautiful inventory amongst AI infrastructure builders. Amongst data know-how distributors, Goldman really useful Ingram Micro and TD Synnex . “We view the IT distributors INGM and SNX, that are among the many main distributors of PCs and campus networking gear, as [a] comparatively extra enticing approach to put money into the 2025 cyclical restoration theme,” the financial institution mentioned. Shares of TD Synnex have gained 10% this yr, and Goldman’s worth goal of $141 implies the inventory might rise one other 18% from present ranges. Whereas Ingram Micro inventory has slipped 12% since its October preliminary public providing worth of $22 per share — Goldman was one of many three lead managers within the IPO — the financial institution’s $33 worth goal corresponds to potential upside of roughly 62%.
