Goldman Sachs research this week focuses on HALO Phase II, European green industrial data, Chinese LLMs, El Niño and TGS energy opportunities

Overview

The report is a compilation of Goldman Sachs research published this week, covering HALO Phase II, Green Barometers, Chinese LLMs, El Niño, TGS and several key research topics. It spans European equities, AI, data centers, commodities, energy, financials, consumer, autos, macro and rating changes, with the primary objective of helping investors prepare for 2Q26 earnings and medium-term thematic allocation through actionable and trackable research themes.

Core views

The core views are: first, the HALO theme has moved from valuation re-rating of capital-intensive assets into earnings validation, with greater divergence between winners and laggards expected; second, European cross-industry Green Barometers show increasingly consistent and continuously improving short- and medium-term data, although market expectations for 2Q are also higher; third, low-priced Chinese LLMs may open the global SME market among price-sensitive customers; fourth, El Niño, energy prices and greater supply-chain concentration increase agricultural risks; fifth, oil prices, geopolitical events and improving demand for seismic exploration support exposures such as TGS; and sixth, the 2Q earnings season has a high bar, with AI, energy-shock transmission and Chinese competition as key areas to monitor.

Analysis framework

The report uses a weekly research-screening and thematic synthesis approach, reorganizing Goldman Sachs' global research by theme, industry and actionable investment view. Its analytical path includes monitoring macro themes, industry data barometers, earnings previews, commodity and energy supply-demand tracking, analysis of AI capital expenditure and financing, summaries of rating changes, and excerpts of the rationales for Buy, Sell, upgrade and downgrade views on key stocks.

Methodology notes

• Thematic investment frameworkHALO

  Heavy Assets Low Obsolescence

  HALO focuses on heavy assets with low obsolescence risk. The report believes valuation convergence in the first phase has largely run its course, and that Phase II should shift toward earnings-driven performance and divergence among companies.

• Industry data frameworkGreen Barometers

  European cross-industry green demand barometers

  This framework uses short- and medium-term data to monitor end-market trends in electrical equipment, technology and commodities; this week's signals indicate greater consistency and sequential improvement in the data.

• Equity factor frameworkGS Factor Profile

  Growth, financial returns, valuation and composite percentile

  Goldman Sachs' factor profile calculates a stock's percentile relative to the market and industry peers using metrics including forward sales, EBITDA, EPS, ROE, ROCE, CROCI and valuation multiples, and uses the composite percentile to support investment decisions.

• M&A probability frameworkM&A Rank

  Acquisition-target probability ranking

  M&A Rank evaluates the probability of a company becoming an acquisition target on a scale from 1 to 3, with 1 representing high probability, 2 medium probability and 3 low probability; Goldman Sachs may incorporate an M&A component into the target price for companies ranked 1 or 2.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• TGS ASA (TGS.OL)

  Beneficiary of energy services and a recovery in oil and gas capital expenditure

  Strengths

  The 2Q26 trading update shows improved multi-client business and fleet demand; oil prices and geopolitical events have increased attention on upstream capital expenditure, and the stock has been included on the Conviction List.

  Weaknesses

  The demand recovery remains dependent on oil prices, exploration budgets and the persistence of the cycle.

  Comparison

  Compared with direct oil-price exposure, TGS provides indirect exposure to the seismic exploration and oilfield-services cycle.

  Risks

  Oil prices falling below the capital-expenditure trigger range, energy companies cutting budgets, geopolitical tensions easing or project delays.

• Schneider Electric

  Beneficiary of European green industrials and electrical equipment themes

  Strengths

  Green Barometers show improving short- and medium-term data, with relatively positive end-market demand for electrical equipment; the stock remains favored by analysts and is included in the CL.

  Weaknesses

  The bar for 2Q orders and EBITA is high.

  Comparison

  Compared with other multi-industry companies, Schneider has more direct exposure to electrification, energy efficiency and data center-related demand.

  Risks

  Orders falling below market expectations, valuation pressure and a slowdown in industrial demand.

• Microsoft Corp. (MSFT)

  Core company in the AI product cycle and cloud capital-expenditure themes

  Strengths

  Analysts believe the risk-reward profile is positive ahead of 4QFY results, with near-term fundamentals improving and the company capable of compounding an AI-driven product cycle.

  Weaknesses

  Large-cap technology stocks have already accumulated substantial AI expectations, creating a high bar for earnings delivery.

  Comparison

  Compared with hardware suppliers, Microsoft is more exposed to AI software, cloud and monetization through enterprise applications.

  Risks

  AI commercialization progressing more slowly than expected, questions about returns on cloud capital expenditure, and regulatory or competitive pressure.

• London Stock Exchange Group (LSEG.L)

  Beneficiary of data consumption, vendor consolidation and AI risk reassessment

  Strengths

  The report believes commercialization of the Model Context Protocol, structural data consumption and vendor consolidation remain supportive, while AI risks may be overly reflected in the market.

  Weaknesses

  Data-service companies continue to face long-term uncertainty over how AI may change information distribution.

  Comparison

  Compared with traditional exchange businesses, LSEG's data and analytics business is more directly connected to AI and enterprise data-consumption themes.

  Risks

  AI replacing existing data products, slower customer budgets and intensifying competition.

• Glencore (GLEN.L)

  Beneficiary of tightening supply in copper, zinc and metallurgical coal

  Strengths

  Analysts favor its preferred commodity exposures and upgraded it to Buy, citing supply disruptions, trade-policy risks, marketing-business earnings and attractive relative valuation.

  Weaknesses

  The company's earnings are sensitive to commodity prices and the trading environment.

  Comparison

  Compared with diversified mining peers, Glencore is viewed as more attractive in terms of preferred commodity exposure and marketing earnings.

  Risks

  Falling commodity prices, easing supply tightness, and policy and regulatory risks.

• Banco de Sabadell SA (SABE.MC)

  European bank newly covered with a Sell rating

  Strengths

  The report does not emphasize any significant strengths.

  Weaknesses

  SME exposure accounts for 43% of the domestic book, implying higher structural risk, credit costs and non-performing-loan pressure; the valuation also carries a premium relative to European bank coverage.

  Comparison

  Compared with European banking peers, the risk-reward profile is considered insufficiently attractive.

  Risks

  If the Spanish economy and SME credit performance are better than expected, the Sell view could face downside risk.

Key data

• Chinese low-end agentic LLM pricingUS$0.06-0.2 / per million mixed tokensThe report says this price range can help models enter the price-sensitive SME and individual-company markets.
• MiniMax overseas revenue share60-70%Used to illustrate that some Chinese AI models have already established revenue streams in overseas markets.
• Oil price triggering oil and gas capital expenditureAbove US$60/bblMichele Della Vigna believes oil and gas capital expenditure has scope to recover when oil prices are above this level.
• Agricultural trade concentrationThe top three countries account for 60-90% of global tradeThis applies to commodities including soybeans, corn, rice, sugar and palm oil; concentration amplifies El Niño and policy risks.
• Next 1H27 group sales forecast6.5%Richard Edwards raised the forecast from 4.9% to 6.5%.
• European 1H consensus earnings growth11% year-on-year; 6% excluding commoditiesThe strategy team notes that the 2Q earnings bar is high, although the macro environment remains supportive.
• E.ON long-term EPS CAGR estimateApproximately 8% through 2030EGerman reform measures could increase distribution-network capital expenditure and returns.
• Airbus June deliveries89 aircraftThe report lists this as a positive signal ahead of 2Q/Farnborough and maintains a Buy rating.
• Rating DistributionBuy 50%, Hold 34%, Sell 16%The Goldman Sachs global coverage rating distribution disclosed in the table.

Impact & implications

For investors, the report suggests shifting from simply chasing AI and heavy-asset valuation expansion toward testing earnings delivery, order visibility, capital-expenditure financing capacity and supply-chain risks. European industrials, electrical equipment, defense, energy services, selected financials and companies with AI-related data-consumption exposure receive particular attention; meanwhile, high earnings-season expectations, energy shocks, Chinese competition, concentrated agricultural supply and valuation hurdles following prior stock gains are the main constraints.

Risks

• The 2Q earnings season has a high bar; if orders, sales or earnings fail to exceed expectations, stocks that have previously rallied may come under pressure.
• AI capital expenditure requires continued financing support; if credit or capital-market conditions tighten, the pace of data center construction could slow.
• El Niño, rising energy prices, Suez or other shipping disruptions, and protectionist policies could raise agricultural prices and disrupt consumer-goods margins.
• Supply shocks related to the Middle East and Russia could amplify volatility in oil prices and refining margins.
• Chinese competition in autos, AI models and selected industrial sectors could pressure the market share and pricing power of European and US companies.
• After the HALO theme shifts from valuation re-rating to earnings validation, crowded positioning and earnings divergence could make stock selection more difficult.

What to watch

• Whether orders, EBITA, EPS and management guidance validate high expectations during the 2Q26 earnings season.
• AI data center capital expenditure, financing structures and CapEx updates from hyperscale cloud providers.
• Commercialization progress of Chinese LLMs among overseas SMEs and in low-cost application scenarios.
• The actual impact of El Niño on the Indian monsoon, cocoa, palm oil and other concentrated-supply agricultural commodities.
• Whether oil prices remain above US$60/bbl and whether demand for TGS and other oilfield-services companies continues to improve.
• Changes in orders and capital expenditure at European electrical-equipment, mining-equipment, defense and utility companies.
• The impact of dollar forecasts, energy-shock transmission, Chinese competition and AI on macroeconomic conditions and corporate earnings.