Goldman Sachs’ senior strategist John Marshall urges investors to reconsider meme stocks, equities which attract outsized retail investor attention.
Marshall thinks retail excitement is spilling from niche sectors such as crypto and artificial Intelligence (AI) to large-cap stocks, creating an asymmetrical upside potential.
In his most recent research note, Mr. Ayers said that with retail flows increasing and the likelihood of monetary policy easing, this setup has begun to look like the speculative frenzy in 2021.
Why does Goldman Sachs advise meme stock ownership?
John Marshall’s positive thesis about meme stocks was based on two tailwinds that were interconnected: a softening of inflation, and the increasing probability of a rate cut this September.
Goldman Sachs strategist believes that if the Federal Reserve continues to lower interest rates, it could significantly increase risk appetite, especially for retail traders.
He said that retail flows had recently changed from small cap speculative names to large cap tech and industrial companies, which suggests a broader trend.
The investment bank warned that any unexpected rise in inflation could change the trend.
Call options are recommended to take advantage of potential gains.
Goldman Sachs has identified two memes with large cap (and high retail participation), that will be of particular interest to them in the second half 2025.
Palantir Technologies Inc (NASDAQ: PLTR)
Palantir is a favorite among retail traders thanks to government contracts, AI stories, and an online cult following.
Goldman Sachs reported that the net retail trading in PLTR was about $1.2 billion during the last month. This makes it the S&P 500 stock most actively traded by Main Street.
Palantir is still valued at a high level, but its recent wins in the defense and enterprise segments indicate rapid growth for both its government and commercial core sectors – proving that it’s more than a mere speculative stock.
In a CNBC interview, Dan Ives, senior analyst at Wedbush Securities said: “If you focused on valuation then you would have missed all the transformational technology stocks in the past 20 years.”
Advanced Micro Devices Inc. (NASDAQ: AMD).
AMD recently attracted retail attention by generating $774 millions in net sales.
Chipmaker Intel is seen as one of the key beneficiaries of AI, its GPUs being increasingly used in high-performance computers and data centers.
AMD shares are also trading at an overvalued valuation in comparison to historic norms. However, John Marshall is convinced that its fundamentals will support further gains, especially as institutional interest via derivatives has been rising along with retail.
Plus, with Advanced Micro Devices’ recent agreement to share revenue in China with the US Government, it is expected that its finances will continue to improve.
The investment bank stated that AMD stocks offer both substance and momentum.
The post Goldman Sachs: Buy meme stocks as if it were 2021: Here are its top choices may change depending on the updates.
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