Goldman Sachs has named four favorites in AI stocks. It expects them to grow by at least 13%

Goldman Sachs has named four companies whose shares are worth buying amid the artificial intelligence boom. It is betting on manufacturers of both universal and customized chips, as well as developers of software for computer-aided design of electronics, which are in demand amid large-scale investments in AI. According to the bank's forecast, the inference market - a segment of AI related to the use of already trained neural networks to perform tasks - will grow dramatically over the next five years. The main driver of growth in this segment will be large cloud providers and the corporate sector, according to Goldman Sachs.

- Nvidia. Since the start of 2025, Nvidia shares have already given investors more than 21% returns. But Goldman Sachs analyst James Schneider set a target price for the company's securities at $185 apiece - another 13.5% above the July 9 close, reports CNBC. Schneider said Nvidia will remain the biggest beneficiary of the continued growth of AI infrastructure thanks to its broad customer base, technology leadership, rapid pace of upgrades and still-attractive share price.

- Broadcom. Goldman Sachs has set a $315 target for this chipmaker, which also implies the company's market value is up another 13% from the close of recent trading. Broadcom shares are up nearly 20% since the beginning of the year. Schneider believes the chipmaker will continue to build its market share in the custom chips  market for large cloud companies. He also noted the sustained profitability of the company's infrastructure software business, adding that AI will account for more than 40% of Broadcom's revenue by 2026. "We believe the stock's high valuation is justified due to the transparency provided by the exclusive supply of chips and the critical nature of the company's software portfolio," Schneider said in a note cited by CNBC.

- Cadence Design Systems. Schneider expects shares of this maker of chip design software and hardware to rise another nearly 18% over the horizon of the next 12 months ($380 target price). Since the beginning of the year, theyhave risen by about 7.5%. According to the analyst, Cadence is a high-quality business with several growth drivers.

- Synopsys. Shares of this developer of software and IP blocks (Intellectual Property blocks) for microchip design have risen by more than 13% since the beginning of the year. Goldman Sachs  believes they have the potential to rise by almost as much more (target price - $620 per paper). According to the analyst, in the long term, the driver of growth in quotes of the company will be the increasing prevalence of custom chips, especially among customers with an increased need for IP-blocks. At the same time, he warned about possible risks associated with export restrictions on supplies to China.

Investment in AI is in transition: over $350 billion has already been invested in infrastructure, and while monetization is still lagging, the real benefits - revenue growth and cost reduction - are starting to emerge, Schneider notes. This, he believes, justifies continued investment, which will only grow over time.

The analyst also pointed to the practical results of AI adoption, such as automation and increased sales, which paves the way for reinvestment in future growth. He expects future semiconductor investments to evolve in a "barbell" fashion, with technology leaders and ecosystem builders on one side and manufacturers of affordable, custom solutions making AI mainstream on the other.

This article was AI-translated and verified by a human editor