Goldman Sachs US Stock TMT Outlook: Significant Capital Outflow, Defense and IT Service Stocks Become the Focus

According to the Zhitong Finance APP, Goldman Sachs recently released a research report indicating that the U.S. TMT sector is facing significant headwinds, while defense stocks are soaring due to geopolitical tensions. The IT services sector is expected to see growth, with key upcoming meetings and events likely to provide further guidance, while the semiconductor and hardware sectors are dealing with delays and pricing pressures.

Poor Performance of U.S. TMT Stocks

U.S. long/short (L/S) fund managers have recently experienced their worst 7-day performance since October 2022 (down 284 basis points), currently up 98 basis points year-to-date. The TMT long/short funds have been hit the hardest. On February 18, 2025, TMT long/short funds rose by 8%, but have now dropped to 2%.

In particular, U.S. TMT stocks have seen hedge funds significantly reduce their risk exposure in recent weeks, with the nominal deleveraging scale of U.S. TMT in February tracking as the second largest on record (only behind the meme stock frenzy in January 2021). The total exposure to U.S. TMT is close to a 5-year low, at the 5th percentile, with net exposure slightly higher but below the 5-year average, at the 36th percentile.

Reasons for the Downward Trend

The decline in the U.S. TMT sector can be attributed to several factors. Despite decent earnings performance, capital rotation (reduced risk in AI themes, tariff issues, DOGE, consumer anxiety, and weak data) has led to market volatility.

Specifically, the performance of the "seven major tech stocks" has varied significantly year-to-date: Tesla has dropped 28% due to weak demand and increased competition, while Google and NVIDIA fell by 10% and 7%, respectively. Microsoft and Apple/Amazon saw declines in the range of 3%-6%, with only Meta benefiting from a recovery in advertising and AI investments, rising by 14%.

Meanwhile, the risk exposure of the U.S. TMT sector continues to contract, with total exposure at a five-year low (5th percentile). Although net exposure is slightly higher than total exposure, it remains below the five-year average (36th percentile). The nominal deleveraging scale of the TMT sector in February reached the second highest level in history, only lower than during the "Meme stock" frenzy in January 2021, indicating a growing risk-averse sentiment among investors towards overvalued assets.

European Defense Sector: Geopolitical Conflicts Drive Structural Opportunities

Driven by weekend events, European defense stocks have surged, seen as another "wake-up call" for Europe to strengthen its security mechanisms and self-sufficiency.

Leading companies such as Rheinmetall, BAE Systems, and Thales have seen their stock prices rise by 15%-20% in response to recent geopolitical events. Spanish company Indra has attracted attention due to its valuation trough effect, with a current price-to-earnings ratio of only 10.5 times, significantly lower than peers like Thales (20.5 times) and Leonardo (20 times). Potential catalysts include asset revaluation opportunities that may arise from the sale of its Minisait business. Additionally, technology company DSY is viewed by the market as an indirect beneficiary of increased European defense spending due to its clients in the defense sector.

This trend indicates that geopolitical risks are shifting from being driven by short-term events to long-term industrial logic, and the sustained growth of European defense spending may provide performance support for related companies Technical Conferences and Industry Barometers

Recently, a series of industry conferences have been held, becoming an important window for observing technological trends. Goldman Sachs will host a disruptive technology seminar in London on March 4-5, focusing on AI and fintech, where the CFO of OpenAI and the CEO of Helsing will discuss the commercialization path of generative AI. Additionally, signals released from the Mobile World Congress (MWC) indicate that telecom equipment manufacturers Ericsson, Nokia, and smartphone maker Xiaomi are accelerating the integration of 5G-A and AI terminals.

It is noteworthy that the summary of the European technology conference shows an increasing divergence in the software industry: the visibility of IT service demand is low, generative AI applications are more focused on cost optimization rather than revenue growth, and corporate merger and acquisition activities maintain a cautious attitude. These trends reflect companies' strategic contraction in a high-interest-rate environment.

Sector Sentiment Divergence

Hedge fund operations show significant divergence. Fundamental funds fell 0.7% this week due to Beta drag, while systematic strategy funds rose 1.7% (cumulative +4.1% in February). Global accounts experienced the largest single-week net sell-off since January 2024, with North America leading the selling wave, while technology and healthcare sectors saw reductions, and real estate attracted capital inflows.

In terms of sector sentiment, technology stocks were suppressed by the retreat of the AI theme and tariff uncertainties, with the NDX index down 4% in February; the financial sector was pressured by weak capital market activities; the industrial sector faced both short-cycle recovery signals (ISM rebound) and defense policy pressures; the energy sector benefited from strong natural gas prices and OPEC+ supply management expectations.

Semiconductor Industry Faces Capacity Adjustments and Storage Market Volatility

The semiconductor equipment and manufacturing segments are facing phase-specific pressures. Intel has postponed the production launch of its Ohio chip factory to 2030-2031 (originally planned for 2028), primarily due to demand matching and financial considerations; at the same time, market rumors suggest that COWOS advanced packaging orders have been cut, which Goldman Sachs believes may stem from yield fluctuations caused by Nvidia's architecture switch, rather than a substantial decline in demand.

The storage chip market exhibits cyclical characteristics: Goldman Sachs expects DRAM and NAND prices to decline by low double digits quarter-on-quarter in Q1 2025, with a narrowing decline in Q2, and memory stock valuations are likely to recover as inventory cycles bottom out. This forecast provides investors with a potential time window for contrarian positioning.

IT Services Show Cyclical Recovery and Regional Divergence

The IT services industry is showing early signs of recovery. Goldman Sachs analysts point out that the growth rate of consulting services has surpassed that of traditional outsourcing, and leading indicators of deferred software revenue (which typically lead consulting services by 2-4 quarters) suggest that if demand continues to improve by 2026, there is an expected upward revision space of 5%-7% in the industry. Targets with "cyclical leverage" such as Accenture (ACN), Globant (GLOB), and EPAM Systems (EPAM) are listed as priority recommendations.

Regional performance differences are significant: CAP companies with a high market share in Europe may lag behind their North American counterparts due to lower exposure to financial services. This divergence suggests that investors need to pay attention to the matching of regional economic recovery rhythms and structural opportunities in the industry