Goldman Sachs named Chinese stocks it says are likely to benefit from advances in creative artificial intelligence — and two are on the bank’s punishment list of bought names. In two research notes dated July 16, Goldman provided an overview of the opportunities and risks posed by creative AI and selected stocks to benefit. Goldman analysts led by Ronald Keong said generative AI would require massive amounts of data processing capacity, poised to boost the cloud computing arms of Chinese internet giants Baidu, Alibaba and Tencent. In its base case, the bank said, it expects generative AI to add 151 billion yuan ($21 billion) to the cloud computing market in China by 2027. E-commerce firm Alibaba is on Goldman’s assurance list — the bank said it expects the company to “return to positive advertising,” growing 2020 percent from the June 2020 rate. “We see Alibaba as an excellent value stock proxy to enjoy advertising recovery, fintech … and cloud structural growth,” the analysts said. Bedouin is also on Goldman’s sanctioned list. The bank called it “a key AI beneficiary given its multi-year investment as an AI leader in China”. In 2019, Baidu launched Ernie, its large language model (LLM) chatbot, and Goldman said the company is “in a leading position in LLM and AI after years of investment.” As for WeChat owner Tencent, the bank laments that it is “one of our top buy ideas this year in terms of ad growth and payment recovery, as highlighted in our 2023 outlook. We continue to see Tencent as a key proxy for advertising recovery supported by video accounts and broader WeChat ad recovery.” — CNBC’s Michael Bloom contributed to this report.
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Source by [CNBC News]
