Goldman Sachs Updates Conviction List, Focusing on AI Token Surge and Supply Chain Opportunities
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Goldman Sachs Updates Conviction List, Focusing on AI Token Surge and Supply Chain Opportunities
Goldman Sachs added Naturgy, Norsk Hydro, and flatexDEGIRO to its Conviction List while deeply analyzing the token demand surge driven by the AI agent economy and supply chain impacts amidst Middle East tensions.
- Added Naturgy, Norsk Hydro, and flatexDEGIRO to the Conviction List
- Forecast AI agents will drive a 24x increase in token consumption by 2030
- Watch for potential impact of Middle East局势 on jet fuel and chemical supply chains
- Multiple European automakers and industrial stocks showed solid performance but face upward cost pressure
- Positive outlook on utility investment opportunities driven by surging data center power demand
Report interpretation
Overview
This report is the weekly 'Connecting Points' series released by Goldman Sachs, aiming to integrate the latest market dynamics, earnings reviews, and research viewpoints. Core content includes updating the Conviction List across global regions, focusing on the explosive growth in token consumption triggered by the AI Agent Economy, and the impact of geopolitical tensions in the Middle East on energy and chemical supply chains. The report covers financial performance and rating adjustments of dozens of key companies from technology, energy, industry, and consumer sectors.
Core views
Conviction List Update: Goldman Sachs added three conviction targets in the Europe region: 1) Naturgy, benefiting from strategic pivot towards growth and short-term rise in LNG prices; 2) Norsk Hydro, expected to fill the Aluminum Value-Added Products (VAP) gap caused by Middle East turmoil; 3) flatexDEGIRO, benefiting from increased participation of European retail investors and its scale advantage. Informa and Bureau Veritas were removed. The US region added IBKR and UNH, removing ABT and KEYS. Asia-Pacific region added Yaskawa, Inovance, etc. AI Agent Economy and Token Surge: Analyst James Schneider points out that by 2030, consumer and enterprise-level AI agents could push token consumption to over 24 times current global capacity. This is not just a demand story, but also a margin expansion story, as falling token costs will make more enterprise use cases economically viable. Currently, some agents (like coding agents) are cheaper than human labor, and token economics are expected to turn positive in the first half of 2026. Beneficiary targets in Europe include Ceres Power (data center power bottlenecks), Schneider Electric, etc. Supply Chain and Energy Security: Middle East situation has led to increased supply chain risks, especially in aviation fuel and chemicals sectors. Even under the base case, aviation fuel supply will tighten. The chemical industry faces pressure from rising input costs that are hard to pass through, especially in consumer-facing segments. In the automotive industry, raw material and DRAM cost inflation is expected to cause at least 170 basis points of EBIT margin pressure in H2 2026-2027. However, this brings structural opportunities such as energy security, electrification trends, and declining bond yields favoring utilities like Enel, RWE, Orsted. Key Company Performance Overview: - Technology and Semiconductors: Infineon raised full-year guidance due to strong AI power semiconductor demand; AMD upgraded to Buy driven by AI agent-fueled server CPU tailwinds; ARM core licensing business missed expectations but data center demand offset smartphone weakness. - Industry and Automotive: BMW's Q1 auto EBIT and free cash flow exceeded expectations; Ferrari slightly exceeded expectations; Knorr Bremse orders exceeded expectations. However, the overall industry faces tariffs and cost pressures. - Consumer: Anheuser-Busch InBev returned to volume growth, especially Brazil benefiting from the FIFA effect; Zalando reiterated guidance; Next achieved growth despite weak UK consumer sentiment. - Financials: HSBC asset quality is under focus, but NII and return path are strong; Wise capital return framework is under focus due to strong free cash flow generation.
Analysis framework
The report adopts a combined top-down and bottom-up approach. First, analyze the impact of geopolitics (Middle East situation) on supply chains and energy prices from a macro strategy perspective, identifying most affected industries (e.g., aviation, chemicals, automotive). Second, dive into technical frontiers, analyzing long-term trends of AI agent economy (token consumption, cost comparison) through modeling to find structural winners in the industry chain (e.g., power, hardware, specific software). Finally, combine intensive Q1 earnings season to review specific company performance point-by-point, verifying how these macro and tech logic manifest at the micro level, and adjust the Conviction List and individual stock ratings accordingly.
Methodology notes
AI Token Supply/Demand and Cost Analysis
By comparing the token demand generated by AI agents (demand side) with computing power supply and costs (supply/cost side), judge the economic inflection point of AI applications. The report notes that as token costs fall, the cost advantage of AI agents relative to human labor will emerge, driving mass adoption.
Supply Chain Disruption Transmission Mechanism
Analyze how upstream raw material (e.g., Middle East oil, chemicals, DRAM) supply disruptions or cost increases transmit downstream (e.g., automotive manufacturing, consumer goods), assessing each link's ability to pass on costs and the degree of profit margin damage.
Application of SOTP Valuation Method in Weichai Power
For diversified companies (such as Weichai Power), value different business segments (e.g., engines, new energy, etc.) separately and sum them up to reflect intrinsic value more accurately, especially when certain segments have revaluation potential.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Naturgy (NTGY.MC)Added to Conviction List, benefiting from LNG price rise and strategic pivot
- Strengths
- Strategic pivot towards growth, short-term LNG price boost
- Risks
- Energy price volatility
- Norsk Hydro (NHY.OL)Added to Conviction List, filling aluminum VAP gap
- Strengths
- Supply gap opportunity brought by Middle East disruption
- Risks
- Aluminum price volatility, geopolitical risk
- flatexDEGIRO (FXXG.DE)Added to Conviction List, benefiting from European retail investment growth
- Strengths
- Scale advantage, competitive pricing, wide product range
- Risks
- Intensifying market competition
- Infineon (IFXGN.DE)Buy, strong demand for AI power semiconductors
- Strengths
- Expansion per kW of AI content, accumulation of automotive orders
- Weaknesses
- Forex headwinds
- Risks
- Semiconductor cycle downturn
- AMD (AMD.US)Upgraded to Buy, AI agents driving CPU demand
- Strengths
- Tailwind for server CPUs, data center GPU upside post-2027
- Risks
- Increased competition
- Enel (ENEL.MI)Buy (Conviction List), valuation discount hard to justify
- Strengths
- Structural opportunities in renewable energy, declining bond yields favorable
- Weaknesses
- Quarterly results slightly below expectations
- Risks
- Regulatory policy changes
Key data
- 2030 AI Token Consumption Growth Multiple24xRelative to current global capacity, driven by consumer and enterprise agents
- Auto Industry EBIT Margin Pressure170bpsExpected H2 2026-2027, caused by raw materials and DRAM cost inflation
- AI Hyperscaler CapEx Forecast (2026)$755 billion+83% YoY, consensus expectation
- US Data Center Capacity GrowthOver 2xFrom end of 2025 to end of 2027, assuming only 50-60% of planned new capacity is realized
- European Bank PBT Beat Magnitude~4%Average data for 30 banks
Impact & implications
The report believes the rise of the AI agent economy will reshape the profitability model of the tech industry, shifting from pure hardware sales to continuous token consumption and service revenue, benefiting companies with infrastructure advantages and cost control capabilities. Uncertainty in the Middle East situation brings short-term supply chain disruption and cost pressure, but accelerates the process of European energy independence and electrification, providing structural support for utilities and renewable energy companies. Investors should focus on companies capable of passing on costs, having pricing power, or occupying key positions in supply chain bottlenecks.
Risks
- Escalation of Middle East geopolitical conflict leading to further energy and supply chain disruptions
- Token cost decline speed failing to meet expectations, affecting commercialization progress
- Raw materials and DRAM costs continuing to inflate, squeezing automotive and manufacturing margins
- Global economic slowdown leading to weak consumer demand, affecting discretionary consumption and advertising spend
- Interest rates remaining high for too long, increasing financial burden on highly leveraged industries (e.g., utilities, real estate)
What to watch
- Developments in Middle East situation and their specific impact on jet fuel and chemical supply
- Actual growth data on AI agent adoption rates and token consumption volumes
- Interest rate policy movements from ECB and Federal Reserve
- Capital expenditure guidance from major tech companies (e.g., Nvidia, Microsoft)
- Recovery situation in Chinese automobile and consumer electronics markets