Widespread AI adoption may be around the corner, but its effect on stocks is already here.

This is the markets, a new series from Goldman Sachs exchanges.

Hi, I'm Sam Grobart. Today I'm joined by Sung Cho, co-head of tech investing for fundamental

equity within Goldman Sachs Asset Management. We're going to talk about recent tech-fueled

rallies and equity markets, lessons from other tech bubbles, and how all this fits into the

larger economic picture.

Song, thanks so much for joining us today.

Thanks for having me, Sam.

So taking a look back over the last month, the NASDAQ has been up about 8% the S&P 500 up about 3.5% how much of that

rally is coming from enthusiasm for AI stocks? So certainly a big part of the

rally Sam as you described has been from the enthusiasm for AI stocks, but I think it shouldn't be ignored how strong the fundamentals

more broadly have been for technology.

So about 75% of tech companies this earnings season

beaten raised on both sales and earnings. And if you try to put that number in

context in an average quarter about 68% of companies beat on sales and so some really big

outperformance and so certainly AI is contributing but tech is really really

strong against the weaker macroeconomic backdrop and so AI really became a catalyst when

Invidia reported earnings a couple weeks ago and they literally blew the quarter out in a way that I haven't seen in a long time.

So that really planted the flag in investors' minds

that I need to start paying attention

to what's going on in AI.

And that's part of what really catalyzed

...