--- title: "July Pattern Reappears! Goldman Sachs: Storage Sector's \"Price-Earnings Divergence\" Most Attractive; Financials and Hard Assets Emerge as New Market Focus" type: "News" locale: "en" url: "https://longbridge.com/en/news/296691285.md" description: "Goldman Sachs believes the era of \"easy wins\" in AI trades is over, with current excess returns confined to precise buying on dips when stock prices significantly deviate from earnings. The storage and data center sectors offer the most tactical appeal. Meanwhile, the market is rapidly moving beyond a singular AI narrative, showing diversified momentum: momentum factors are shifting toward software, European and Japanese banks face structural opportunities, gold and copper miners have room for valuation and earnings recovery, and France's political risk premium is undervalued" datetime: "2026-08-23T03:25:05.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/296691285.md) - [en](https://longbridge.com/en/news/296691285.md) - [zh-HK](https://longbridge.com/zh-HK/news/296691285.md) generator: "portal-rs" --- # July Pattern Reappears! Goldman Sachs: Storage Sector's "Price-Earnings Divergence" Most Attractive; Financials and Hard Assets Emerge as New Market Focus Goldman Sachs warns that cracks in AI momentum are emerging, urging investors to remain highly alert to the widening valuation gap between stock prices and earnings per share. Meanwhile, capital is beginning to flow into previously overlooked areas, with hard asset targets such as European and Japanese bank stocks, gold miners, and copper miners gradually becoming the new market focus. **This week's market movement was characterized by Goldman Sachs trader Natasha Tiwana as a typical "de-leveraging rally," the intensity of which caught off guard those who believed the July sell-off was history.** Goldman Sachs' High Beta Momentum Portfolio (GSPRHIMO) fell 12% this week, while its AI hedged portfolio dropped 10% over five days. Goldman Sachs pointed out that the collapse of the current momentum strategy aligns closely with the underlying logic of July. Although leverage levels in the AI sector have retreated from extreme highs, inertial capital in the market continues to drive indiscriminate and rapid "buy-the-dip" behavior. Goldman Sachs believes that the current position clearing, combined with still robust AI fundamentals, lays a healthier foundation for the market to resume risk-taking in September. Meanwhile, the narrative logic of AI trading is undergoing a rapid shift: **As computing costs continue to decline, market focus has shifted from "who wins the large-scale capital expenditure race" to "who are the true beneficiaries in the wave of widespread AI adoption."** ## AI Valuation Gap: Storage and Data Centers Offer Most Tactical Appeal Goldman Sachs believes that AI trading is far from over, but its structure, momentum characteristics, and safety margins are being rewritten in real time. On a tactical level, Goldman Sachs recommends trading around opportunities where "stock prices significantly diverge from earnings per share," noting that **the valuation gaps in the storage sector (GSTMTMEM) and the data center sector (GSTMTDAT) are the most prominent, making them the most attractive tactical opportunities at present.** Based on Goldman Sachs' comparison of weighted average net income expectations against weighted average market capitalization, **the earnings recovery in these two sectors has not yet been fully reflected in stock prices.** NVIDIA's second-quarter earnings report serves as the next key catalyst, followed by the dense industry conference season in September, which will provide important support for the market. Meanwhile, the AI application layer is gradually gaining market attention. This week, Moderna (MRNA) and Merck (MRK) announced a collaboration to develop AI-assisted drugs, sparking broad interest in the healthcare AI sector. Goldman Sachs data shows that the breadth of earnings revisions for healthcare AI beneficiaries (GSXGHDDD) is improving, and the improvement in professional investor sentiment is beginning to drive generalist investors to position themselves in opportunities related to AI drug development. ## Momentum Factor Quietly Refreshes: Software Takes Over from Semiconductors Goldman Sachs points out that the internal structure of the momentum factor is undergoing its most significant reshuffle in years. Data shows that in 2026, the number of single-day drops exceeding 5% for the momentum factor has already surpassed the total of the past five years. More notably, the overlap between 12-month strong performers and 3-month strong performers has fallen to multi-year lows, while the overlap between 12-month strong performers and 3-month weak performers is near historical highs—meaning that last year's market winners are rapidly becoming recent losers. In terms of factor structure, software has replaced semiconductors as the largest weight in the 3-month momentum long portfolio (GSXUHMO3); meanwhile, the semiconductor and AI complex has moved to the short portfolio (GSXULMO3). The structural divergence between short-term and long-term momentum reflects widespread disagreement among investors regarding the "next phase of market leadership," driving continued demand for more sophisticated hedging tools. ## Rise of Bank Stocks: Structural Opportunities for European and Japanese Financials **Goldman Sachs believes that as the market re-digests expectations for the Federal Reserve to maintain higher interest rates for longer, the strategic allocation value of European and Japanese bank stocks is becoming apparent.** Beyond interest rate logic, Goldman Sachs also values the fundamental improvement in non-interest income for European and Japanese banks. Strong fee income growth, more optimized efficiency ratios, and considerable potential for shareholder returns collectively constitute their allocation appeal. **Japanese bank stocks have outperformed both the TOPIX Index and the Japanese semiconductor sector over the past three months, with lower volatility. Sticky inflation and rate hike expectations provide further support for their continued rise.** **In Europe, overall European bank stocks trade at approximately a 15% valuation discount compared to US bank stocks.** Goldman Sachs favors Greek banks within the region, as their valuations are converging toward peers in core Eurozone countries, yet they still trade at about a 10% discount, with additional upside potential from possible M&A activity. Notably, current positioning levels in European bank stocks have dropped to their lowest point in two years, further reinforcing their allocation value. ## Catch-Up Growth in Hard Assets: Gold Miners and Copper Stocks Have Room to Chase Hard asset targets are becoming another main thread in this round of market differentiation. Goldman Sachs had previously turned bullish on gold miners, citing reasons including warming Chinese demand and rising expectations for Federal Reserve rate cuts. The portfolio has accumulated a 32% gain within the month, but remains about 12% below historical highs. Current valuations correspond to only 11 times forward P/E, representing a discount of about 20% compared to the five-year average. **Goldman Sachs believes that the expansion of the US Treasury's bond buyback program will lead to a weaker US dollar, becoming the primary driver for the next phase of gains for gold miners. Meanwhile, ongoing geopolitical risks are also driving demand for gold longs as a safe-haven hedge before year-end.** Regarding copper, copper prices briefly hit record highs this week, supported by both US tariff risks and tight supply in markets outside the US. However, copper mining stocks have consistently lagged behind copper prices and their solid earnings fundamentals since February, dragged down mainly by escalating tensions in the Middle East and the drag from AI trading. **Goldman Sachs points out that at the micro level, tight supply and demand provide support; at the macro level, the July FOMC minutes showed a lack of majority support for rate hikes, meaning any re-pricing toward a more dovish Federal Reserve will benefit industrial metals. Copper mining stocks have clear room for stock prices to catch up with earnings.** ## French Political Risk: An Undervalued Potential Tail Risk Goldman Sachs also turns its attention to a risk not yet fully priced by the market—domestic politics in France. Since this summer, bets against French government bonds have continued to increase, with the French-German spread (OAT-Bund) widening to about 85 basis points, hitting a new high for the period. However, French domestic equity portfolios had previously remained relatively calm, only starting to show volatility in recent days. **Goldman Sachs believes that French stock valuations have reached high levels, at the 90th percentile of the past five years. Before election uncertainty fully manifests, the market has not priced in the corresponding risk premium.** The upcoming political event calendar will be an important observation window, including the Medef (French Business Confederation) summer annual meeting on August 27 and Justice Minister Darmanin's summer gathering on August 30. Historical data shows that French domestic equity portfolios are far more sensitive to domestic political risks than the CAC 40 index. During periods of political uncertainty, their correlation with credit spreads rises significantly, implying substantial risk of valuation contraction. ### Related Stocks - [FCX.US](https://longbridge.com/en/quote/FCX.US.md) - [ERO.US](https://longbridge.com/en/quote/ERO.US.md) - [SCCO.US](https://longbridge.com/en/quote/SCCO.US.md) - [RIO.UK](https://longbridge.com/en/quote/RIO.UK.md) - [GS.US](https://longbridge.com/en/quote/GS.US.md) - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [MRNA.US](https://longbridge.com/en/quote/MRNA.US.md) - [MRK.US](https://longbridge.com/en/quote/MRK.US.md) - [W4VR.SG](https://longbridge.com/en/quote/W4VR.SG.md) - [NVD.DE](https://longbridge.com/en/quote/NVD.DE.md) ## Related News & Research - [Freeport-McMoRan Inc. $FCX Shares Purchased by Madison Asset Management LLC](https://longbridge.com/en/news/296475186.md) - [Freeport-McMoRan (FCX): New Buy Recommendation for This Basic Materials Giant](https://longbridge.com/en/news/296794439.md) - [Micron vs. Sandisk: Which AI Memory Stock Should You Own?](https://longbridge.com/en/news/296698430.md) - [A mysterious free AI model is impressing developers. 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