Goldman Sachs: AI and geopolitics drive capital expenditure super cycle, enhancing the value of active stock selection

Goldman Sachs has released a report stating that the world is entering a capital expenditure supercycle driven by AI and geopolitics, and that future investment returns will rely more on active stock selection than on valuation expansion. Goldman Sachs estimates that Amazon, Meta, Google, Microsoft, and Oracle will together spend about $75.5 billion in capital expenditures in 2026, rising to approximately $92 billion in 2027. The momentum in capital expenditure is spreading from data centers to the energy, industrial, and infrastructure sectors. Goldman Sachs recommends four thematic investment baskets: artificial intelligence, defense spending, power and electrification, and HALO.