Goldman Sachs Sees Chip Stock Opportunity but Urges Selective Buying, PHLX Up 80% YTD

According to Goldman Sachs, on July 7, semiconductor stocks offer investment opportunities following a pullback, but AI chip trading has shifted to a more selective phase, with investors no longer able to simply buy the entire sector. The PHLX Semiconductor Index has surged over 80% year-to-date, significantly outpacing the S&P 500 and Nasdaq, raising the bar for earnings delivery and creating divergent risk-reward dynamics ahead of second-quarter results.

Goldman Sachs remains bullish on specific segments including CPUs, ASICs, memory, and semiconductor equipment, citing more direct benefits from AI infrastructure expansion and higher demand visibility. The bank named AMD and Applied Materials as preferred picks, citing AMD's exposure to server CPU and AI demand, and Applied Materials' positioning in advanced process and memory capital expenditure.