Despite investors’ jitters over the debut of the DeepSeek artificial intelligence app, Goldman Sachs remains confident in the stock market. “In our view this is a correction and not the start of a sustained bear market,” chief global equity strategist Peter Oppenheimer wrote in a 16-page note to clients on Wednesday, entitled “Concentration & Correction — what to do next.” While U.S. equities, led by the ” Magnificent Seven ” stocks, have dominated the global market, Oppenheimer said this outperformance isn’t “irrational exuberance,” but just a reflection of superior fundamental businesses. Tech’s influence on the broader market’s performance has reflected the sector’s surging profits in comparison to other industries during the same period. Despite that, there remain other attractive opportunities in the U.S. market and beyond, he added. “This suggests that we are not at the start of a major rotation out of all that has performed best into everything that has lagged, but rather are at the start of a longer period of market broadening,” Oppenheimer said. As a result, the London-based strategist advises investors to diversify their holdings, recommending staying long stocks, but to hedge some risk by overweighting safe-asset bonds. When looking at the U.S., he touts the S & P MidCap 400 index or the S & P 500 Equal Weight index. For growth opportunities, investors should look to global growth names outside of technology. “These have the advantage of being cheaper than technology but also more diversified,” said Oppenheimer.
