Goldman Sachs: AI Momentum Fades, European/Japanese Bank Stocks and Hard Assets Like Gold Equities Become Next Trading Themes

The era of "easy gains" from AI trading is over. Goldman Sachs warns that momentum in the semiconductor and AI sectors has shifted from long to short, with software taking over; in 2026, the number of days with momentum factor declines exceeding 5% has surpassed the total of the past five years combined. Goldman Sachs believes that interest rate tailwinds combined with valuation discounts favor European and Japanese bank stocks, while expectations of a weaker dollar driven by the U.S. Treasury's expanded bond buyback program will fuel the next rally in gold mining stocks. It also highlights the severely underpriced French political tail risk.