Goldman Sachs favors hyperscalers over chipmakers in AI infrastructure

Goldman Sachs analyst Jim Covello suggests that investors should favor hyperscalers over chipmakers to profit from the AI infrastructure buildout. This recommendation is based on the belief that the market has undervalued hyperscalers, despite their significant capital spending on data centers, while chip stocks have already seen substantial gains. Covello posits that if hyperscalers demonstrate a positive return on investment, their valuations could recover, offering more upside than the already-rewarded chip sector.