Goldman Says Tech Bull Market Has Room to Run

Goldman Sachs Wealth Management’s Matt Weir says gains concentrated in a handful of large technology stocks do not mark the end of the bull market. He expects hyperscaler capital-spending growth to slow from its unusually rapid pace but remain well above overall economic growth, and says earnings will determine the next direction for stocks.

Analysis

The key distinction is between slower capex growth and falling capex: the former can still support suppliers and infrastructure demand, but it raises the bar for incremental earnings to justify the largest technology weights. The market’s vulnerability is therefore less a binary “bull market over” call than a mismatch between spending commitments and demonstrated returns—especially if depreciation, power, and other infrastructure costs rise before AI-related revenue scales.

Near term, concentrated leadership can persist while earnings expectations remain intact; a sharp rotation is more likely if guidance disappoints or rates rise enough to pressure long-duration equities. Over 1–3 months, watch hyperscaler capex guidance alongside revenue conversion and margin commentary from infrastructure suppliers—not capex headlines alone. Over 6–18 months, broader participation would validate the bull-market case; continued index gains with weakening equal-weight breadth would leave benchmarks increasingly exposed to a few earnings misses.

Contrarian point: decelerating growth from an exceptional base is not, by itself, evidence of a spending cliff. But the bullish argument is conditional: earnings must validate the investment cycle, and market concentration makes that test asymmetric. There is no article-specific earnings or valuation evidence to support an outright directional call.

Key Decisions for Investors

• Prefer a measured relative-value expression over a broad market short: consider a small long RSP / short QQQ position if breadth deteriorates while mega-cap earnings expectations remain elevated. Reassess on the next round of hyperscaler guidance; cap losses if equal-weight performance and earnings revisions improve together.
• Keep exposure to technology infrastructure selective. Treat supplier strength as conditional on customer spending translating into orders and revenue; avoid extrapolating announced capex into durable supplier earnings without order, backlog, and margin confirmation.
• Monitor hyperscaler capex guidance, AI-related revenue evidence, operating-margin trends, and equal-weight versus market-cap-weight index breadth. A sustained decline in planned spending or negative earnings revisions would falsify the resilient-capex thesis; improving breadth and monetization would weaken the concentration-risk trade.