Goldman’s Covello Says Buy AI Hyperscalers Over Chipmakers

Investors looking to profit amid the buildout boom in AI infrastructure should favor big-spending “hyperscalers” over chipmakers, according to Goldman Sachs Group Inc.’s Jim Covello.

“We recommend being long the hyperscalers vs. underweight semis,” Covello, co-head of equity research and a longtime semiconductor analyst, wrote in a note to clients Thursday. “The starting point for this idea is that the market has priced in a fair degree of skepticism on the return on investment for the hyperscalers, as reflected in significantly compressed multiples for that group.”