Goldman added these stocks to its ‘conviction’ lists — giving one big global tech name 100% upside
Goldman Sachs recently added a number of stocks to its lists of top picks. Called the “Conviction List – Directors’ Cut,” the lists encompass the United States, Europe and Asia-Pacific. The lists are the bank’s “curated and active” picks of between 15 and 30 top buy-rated stocks for each region. These names are selected by a subcommittee designated by the bank’s Investment Review Committee for each region. “The subcommittee will collaborate with each sector analyst to identify top ideas that offer a combination of conviction, a differentiated view and high risk-adjusted returns,” Goldman said. Here are four of the new additions. Constellation Brands Goldman said in a Dec. 1 note that the U.S. beer company is a “market share gainer with positive shareholder value inflection.” The bank believes Constellation Brands is set to continue gaining share in the U.S. beer market as it expands its distribution. Notably, it will be relying more on volume than price to drive growth of between 7% and 9% in the beer segment, Goldman said. Goldman gave Constellation Brands a 12-month price target of $290, representing potential upside of about 19%. SK Hynix Goldman included South Korean chipmaker SK Hynix in its inaugural list of “APAC Conviction List – Directors’ Cut” stocks, released on Dec. 4. It highlighted that the firm is “well on track” in preparing for the next-generation HBM3E, referring to high-bandwidth memory chips. “[It] should allow the company to continue to be the market leader in High-Bandwidth Memory (HBM) for the next couple of years,” Goldman wrote. The bank noted that SK Hynix is currently leading the HBM3 market for Nvidia. Memory with high performance and bandwidth is used in Nvidia’s H100 graphics processing units. GPUs underpin most generative AI tools. Goldman gave SK Hynix a price target of 170,000 Korean won ($131), implying potential upside of around 23%. Foxconn Industrial Internet Goldman said Foxconn Industrial Internet, the Shanghai-listed unit of Apple supplier Hon Hai, is a “key contributor” to the latter. “Given its broad exposure along the AI supply chain, from GPU modules, GPU baseboards, AI servers, and related infrastructure, [Goldman] sees FII as well-placed to capture strong AI demand growth,” the bank wrote. Goldman forecast that artificial intelligence’s contribution to the firm’s revenue will grow from 2% in 2022 to 24% in 2025. The bank said its “comprehensive solutions” set it apart from its competitors. “Additionally, its diverse server manufacturing capacity in Taiwan, Mainland China, South East Asia and Mexico, means clients have the flexibly to choose where to manufacture and deliver their systems,” it said. As a result of this combination, Goldman predicts Foxconn Industrial Internet should gain market share in the AI server era. The stock was also included in Goldman’s inaugural Asia-Pacific conviction list. The bank gave it a price target of 31.61 Chinese yuan ($4.48) — representing potential upside of around 108%. RWE There’s an “increasingly differentiated organic growth opportunity not reflected in the stock price” of German energy company RWE , Goldman said. The bank added the stock to its Europe conviction picks in its Dec. 1 note. Goldman said the firm has “gone back to basics on renewable energy” more so than other green energy major stocks. Goldman expects capacity additions to triple — primarily driven by wind and solar energy, with expected capital expenditure of 55 billion euros ($60 billion) between 2024 and 2030. That’s more than two times the current market cap. Goldman gave the stock a price target of 51 euros, implying upside of around 24%. — CNBC’s Michael Bloom contributed to this report.
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