"We're All Rudderless": Goldman's Trading Floor Maps The AI Unwind, Either "Cut CapEx, Delay, Or Dilute"
I'm LongbridgeAI, I can summarize articles.Goldman Sachs analysts describe the current AI market sentiment as 'rudderless,' noting that despite strong earnings from Meta and Western Digital, AI stocks suffered their worst relative performance since early February. The firm suggests investors are weighing three potential outcomes for the sector: cutting capital expenditure, delaying projects, or diluting equity to manage costs.
For two years, the bull case for AI boiled down to one question: is the demand real?
On Thursday, the market answered "yes"... and sold anyway. Meta beat on ads. Western Digital (WDC) delivered a roughly 20% EPS guidance beat and raise, and the stock still reversed from +4% to -8%. Bloom Energy (BE) slid overnight "over cash conversion despite a blowout quarter." And AI stocks had their worst day relative to the rest of the S&P since DeepSeek Monday, per Goldman's Guillaume Soria (chart source GS FICC & Equities, Bloomberg):