Greg Torto, managing director of Goldman Sachs, believes market conditions look healthy for small stocks.
In new interviewTorto points out that small businesses have been approximately 3 to 4 years since the US Federal Reserve began raising interest rates, and have yet to see the tailwinds expected since the Fed began lowering interest rates.
“We’re starting to see a good earnings cycle in small caps. We think it’s going to be much stronger than the earnings cycle of large companies. We also think it’s a lot cheaper. About 25 to 30 percent cheaper than large caps. Plus, you have an option in the IPO market, which should help. And mergers and acquisitions are starting to pick up, which is also a really good thing, you know, for the small cap market.”
In the small business space, Torto sees the “pick and shovel” aspect of AI as a smart way to lock in wins over a longer timeline.
“I think you’re looking at semiconductors. Semiconductor housing equipment, which didn’t exist two years ago and is now a leading market segment. And some of that optical connectivity that needs to connect these data centers together. You know, there’s a lot of opportunity here. There’s a lot of ways to play it. There’s a lot of different things to invest in. So, I think this could be good, even if software doesn’t join the party like it hasn’t in the past, say, three, six months.”
The Goldman Sachs CEO also says investors should look at the biotech and defense sectors.
Follow us on X, Facebook and cable
Never miss a beat – Subscribe Get email alerts delivered directly to your inbox
browse Hodel’s daily mix
 
Disclaimer: The opinions expressed in The Daily Hodl are not investment advice. Investors should conduct due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of any assets including cryptocurrencies, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated image: mid-flight
