Goldman Sachs August APAC Conviction List update: AI and the semiconductor chain continue to drive earnings upgrades
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Goldman Sachs August APAC Conviction List update: AI and the semiconductor chain continue to drive earnings upgrades
The report reviews multiple companies in Asia-Pacific and the United States, with an overall bullish stance on AI infrastructure, semiconductors, cloud computing, and selected financial and internet assets, while assigning Fanuc a Sell rating.
- Samsung Electronics, Keyence, Shengyi Tech, BYD, and Hong Kong Exchanges were added to the APAC Conviction List, while Victory Giant and Yaskawa Electric were removed.
- MediaTek, Murata, Renesas, TDK, Wiwynn, Sony, and Amazon all received target-price increases due to momentum in AI, data centers, or cloud businesses.
- Amazon’s Q2 revenue was $200.6bn, AWS grew 37% year over year, and AWS operating margin reached 39%; the target price was raised from $335 to $375.
- AIA’s 2Q26 VONB is expected to grow 10% year over year at constant exchange rates, with mainland China remaining the fastest-growing market; the 12-month target price remains HK$97.
- Fanuc was rated Sell due to component procurement constraints, potential duplicate ordering, and market-share loss risks, with a 12-month target price of ¥5,600.
Report interpretation
Overview
This report is Goldman Sachs’ Asia-Pacific and global key-stock earnings and strategy update from the “The 720” series. It covers APAC Conviction List changes, technology hardware and semiconductor earnings, internet and industrial companies, financials and insurance, healthcare, Asian macro developments, and views on major U.S. technology companies and strategy. The core theme is that AI infrastructure is driving continued growth in semiconductors, AI ASICs, MLCCs, NAND, AI servers, cloud services, and related capital expenditures.
Core views
Goldman Sachs believes that AI and data-center demand is significantly improving the revenue and profit outlooks of multiple companies. MediaTek benefits from upward revisions to AI ASIC market-size and market-share assumptions; Kioxia is supported by AI-driven NAND demand and its buyback signal; Murata, Renesas, TDK, Wiwynn, and Sony all reported earnings or guidance above expectations. For Amazon, AWS growth, high-margin advertising, and improved e-commerce efficiency support the target-price increase. In insurance, AIA and Prudential are expected to see slower growth but still maintain sound operating-profit and cash/dividend growth. The main negative case is Fanuc, affected by procurement constraints and substitution risks.
Analysis framework
The report applies a multi-company earnings-review framework, combining quarterly results, management guidance, target-price changes, earnings-forecast revisions, industry demand trends, and macro policy judgments to update stock ratings, Conviction List changes, and 12-month target prices.
Methodology notes
Goldman Sachs’ Asia-Pacific conviction buy list
Used to present stocks within Goldman Sachs’ Asia-Pacific coverage universe with higher investment conviction. This update adds Samsung Electronics, Keyence, Shengyi Tech, BYD, and Hong Kong Exchanges, while removing Victory Giant and Yaskawa Electric.
Comparison of growth, financial returns, valuation multiples, and composite factors
Goldman Sachs uses growth, financial returns, valuation multiples, and composite scores to compare individual stocks with the market and industry peers, supporting assessment of investment characteristics.
Probability ranking of acquisition targets
Goldman Sachs evaluates the probability of companies becoming acquisition targets across its global coverage using qualitative and quantitative factors, ranking them from 1 to 3. M&A factors may be incorporated into target prices for companies with high or medium probabilities.
Goldman Sachs proprietary financial database
Quantum provides access to historical financial statements, forecasts, and ratios, supporting in-depth single-company analysis and cross-industry comparisons.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- 2454.TW MediaTekAI ASIC beneficiary, rated Buy
- Strengths
- 2026 AI ASIC revenue is expected to exceed US$2bn, with upward revisions to 2027 SAM and market-share targets; tape-out progress for next-generation projects is on track.
- Weaknesses
- AI ASIC revenue realization depends on subsequent project volume production and customer progress.
- Comparison
- Compared with the ordinary mobile-chip cycle, AI ASICs offer a higher-growth narrative.
- Risks
- Project delays, market share below the 15%-20% target, or a slowdown in AI capital expenditures.
- 285A.T KioxiaBeneficiary of NAND and AI memory demand, rated Buy
- Strengths
- Management expects AI-driven NAND demand to remain strong and exceed supply before CY27; the ¥800bn buyback signals confidence.
- Weaknesses
- FY3/27 operating-profit forecast was lowered by 1% due to provisions.
- Comparison
- Compared with previous cycles, management confidence reflects higher and more sustainable profit and cash-flow levels.
- Risks
- NAND price cycles, changes in USD/JPY assumptions, and weaker-than-expected demand.
- 01299.HK AIA GroupAsian insurance growth stock, rated Buy
- Strengths
- 1H26 operating profit after tax is expected to grow 10%, net free-surplus generation 12%, with mainland China the fastest-growing market.
- Weaknesses
- A high base in Hong Kong is causing 2Q26 VONB growth to slow.
- Comparison
- Relative to the high-growth phase, near-term growth is more affected by the base effect.
- Risks
- Equity-market performance, new-business growth in Hong Kong and mainland China, and exchange-rate movements.
- US.AMZN AmazonBeneficiary of cloud computing, AI, and advertising, rated Buy
- Strengths
- AWS grew 37% year over year, AWS operating margin reached 39%, and both the chip and AI businesses reached annualized revenue run rates of $25bn.
- Weaknesses
- Q3 guidance was slightly below expectations due to foreign-exchange effects and Prime Day timing.
- Comparison
- Among U.S. mega-cap technology companies, AWS and advertising’s high margins continue to support earnings elasticity.
- Risks
- FY26 capital expenditures rising to $220bn; if AI returns are below expectations, free cash flow and valuation could be pressured.
- US.SONY Sony GroupConsumer electronics/content stock driven by entertainment and sensors, rated Buy
- Strengths
- 1Q operating profit of ¥476.5bn exceeded expectations, and FY3/27 operating-profit guidance was raised to ¥1,720bn.
- Weaknesses
- Some results were affected by U.S. tariff refunds and foreign-exchange assumptions.
- Comparison
- Compared with single-product hardware companies, entertainment content, gaming, and image sensors provide diversified catalysts.
- Risks
- Movie and game release performance, the mobile CMOS sensor mix, and changes in exchange rates and tariffs.
- FanucIndustrial automation risk stock, rated Sell
- Strengths
- 1Q orders were better than expected.
- Weaknesses
- Procurement constraints caused 1Q operating profit to fall below expectations, and production bottlenecks are expected to persist.
- Comparison
- Strong orders may include premature ordering, making the quality weaker than the headline data suggests.
- Risks
- Duplicate orders, order cancellations, and longer lead times causing market-share substitution by emerging competitors.
Key data
- MediaTek target priceNT$7,000Goldman Sachs raised its 12-month target price following better-than-expected 3Q26 revenue guidance and an upgraded AI ASIC outlook. Management expects 2026 AI ASIC revenue to exceed US$2bn, 2027 AI ASIC SAM to reach US$80bn, and a target market share of 15%-20%.
- Kioxia buyback¥800bnKioxia announced an unexpected share buyback and provided 2Q operating-profit guidance of ¥1.9tn; Goldman Sachs’ 12-month target price is ¥116,000.
- Murata 1Q operating profit¥98.5bn1Q operating profit exceeded expectations. The full-year MLCC sales-growth target was raised from 13% to 24%, while AI/DC MLCC sales are expected to grow by more than 100% year over year.
- Renesas target price¥5,5002Q sales and operating profit exceeded expectations, supported by a recovery in automotive applications, AI/data-center products, and price increases.
- Wiwynn target priceNT$10,000June revenue was 22% above Goldman Sachs’ expectations, and 2026-2028E net-profit forecasts were raised by 7%/11%/14%.
- Sony target price¥4,7001Q operating profit of ¥476.5bn significantly exceeded expectations, and FY3/27 operating-profit guidance was raised by ¥120bn to ¥1,720bn.
- Fanuc rating and target priceSell; ¥5,6001Q operating profit of ¥53.5bn was below Goldman Sachs’ ¥56.0bn estimate, and procurement constraints are expected to continue through 3Q.
- AIA 2Q26 VONB growth forecast10% yoyGrowth is expected to slow at constant exchange rates due to a high base in Hong Kong; mainland China is expected to grow 13%, with a 12-month target price of HK$97.
- Amazon target price$375Raised from $335; Q2 revenue was $200.6bn, AWS grew 37% year over year, AWS operating margin was 39%, and FY26 capital expenditure was raised to $220bn.
- U.S. Q2 S&P 500 EPS growth45% yoyExcluding equity-investment gains from mega-cap technology companies, growth was 26%; AI infrastructure stocks contributed approximately one-third of the increase.
Impact & implications
The report reinforces the role of AI capital expenditures and data-center demand in supporting Asian hardware supply chains and U.S. cloud platforms, benefiting companies related to semiconductors, passive components, AI servers, NAND, ASICs, optical communications, and cloud computing. Meanwhile, continued increases in hyperscaler capital expenditures may create external financing needs, while industrial automation stocks may diverge due to supply bottlenecks and competitive substitution.
Risks
- A slowdown in AI and data-center capital expenditures could weaken growth expectations for semiconductors, AI servers, ASICs, MLCCs, NAND, and cloud businesses.
- Hyperscaler capital-expenditure estimates for 2027 have risen above $1tn and may exceed operating cash flow before 2028, creating pressure for external debt and equity financing.
- Earnings upgrades at some companies depend on foreign-exchange assumptions, price increases, tariff refunds, or one-off factors; sustainability requires verification.
- Industrial automation companies such as Fanuc face component procurement constraints, production bottlenecks, and competitive substitution risks.
- New-business growth at insurers may be affected by the high base in Hong Kong, product margins in mainland China, and capital-market performance.
What to watch
- MediaTek’s next-generation AI ASIC tape-out progress and 2028 mass-production plans.
- Kioxia NAND supply-demand conditions, pricing trends, and execution of the ¥800bn buyback.
- AI/data-center orders, pricing strategies, and capacity-expansion pace at Murata, Renesas, TDK, and Wiwynn.
- Returns on Amazon’s $220bn FY26 capital expenditure, AWS growth rate, and advertising margins.
- VONB, operating profit, free surplus, and dividend performance in AIA and Prudential’s 1H26 results.
- Acceleration of China’s fiscal policy in 2H26, government-bond issuance, and implementation of investments in high-tech manufacturing and the green transition.