Goldman Sachs selects two potential stocks: AI marketing platform Braze and medical technology Carlsmed receive "Buy" ratings

The stock market has strongly rebounded from the sharp decline in April and has reached an all-time high. Year-to-date, the S&P 500 index has risen by 11%, and the Nasdaq index has increased by 13.5%, reflecting the market's continued optimistic sentiment. Against this backdrop, David Kostin, Chief U.S. Equity Strategist at Goldman Sachs, summarized the current situation and made predictions for the coming months.

Kostin stated: "As the economy moves past the most severe impacts of tariffs, we expect the Federal Reserve's imminent interest rate cuts and a re-acceleration of economic growth in 2026 to support further gains in U.S. equities." He added: "Our economists predict that the Fed will cut rates three times this year. Additionally, they expect the U.S. economy to avoid a recession and re-accelerate to trend growth levels by 2026. Historically, during periods of sustained economic growth and Fed rate cuts that avoid recession, the S&P 500 typically generates positive returns... We expect the S&P 500 to rise by 2% by the end of the year and by 6% by mid-2026."

In addition to this macro outlook, Goldman Sachs analysts are busy screening individual stocks that they believe have strong potential. Two stocks have received a "Buy" rating from Goldman Sachs and have double-digit upside potential.

Braze (BRZE.US)

First, we focus on Braze in the software technology sector, which provides a customer engagement platform optimized for multi-channel marketing for enterprise clients. Its cloud-based platform prioritizes conversations over sales, providing a clear path from information acquisition to comfortable purchasing for the target audience.

Braze's platform is data-driven and powered by artificial intelligence, integrating information from a wide range of sources. Enterprise clients use the platform to engage with their users, transforming the sales funnel into an information journey, and facilitating sales through cross-channel messaging based on real-time data analysis. Braze's approach helps establish positive long-term relationships between marketers and customers.

The company leverages AI technology to maintain the platform's relevance in the rapidly evolving technology and marketing environment. Braze's AI aims to create relevant information, ultimately forming personalized content and recommendations for optimal results. From the marketer's perspective, AI automates most processes to respond more quickly to customer needs; from the customer's perspective, AI-driven marketing provides a more relevant sales funnel to maintain engagement.

The software company's platform is suitable for businesses of all sizes, with clients including well-known brands such as Chime, Canva, and TurboTax. Currently, Braze has approximately 2,422 enterprise clients, reaching 7.4 billion active users daily. Last year, the platform processed over 39 trillion messages and other operations.

High-quality products and effective technology have brought financial success to Braze. For the second quarter of fiscal year 2026 ending July 31, Braze reported revenue of $180.1 million, a year-over-year increase of 24%, exceeding expectations by nearly $8.5 million. The non-GAAP earnings per share were $0.15, exceeding expectations by $0.12.

Goldman Sachs analyst Gabriela Borges pointed out several reasons to consider this a good buying opportunity: "We continue to view Braze as a preferred stock and see its market share accelerating growth by 2025: a) clients are more willing to upgrade their marketing tech stack after a three-year digestion period; b) As Braze addresses the least healthy renewal cohorts, the net revenue retention (NRR) remains mechanically stable; c) targeted improvements in sales and marketing (S&M) reduce adoption barriers and enhance engagement. These views support its "buy" rating, with a target price of $52 indicating a 73% upside potential over the next year.

Carlsmed (CARL.US)

The medical technology company Carlsmed is in the commercialization stage, focusing on personalized spinal surgery through AI, aiming to reduce surgical costs while improving patient outcomes. The company currently focuses on spinal fusion surgeries, with its aprevo platform supporting AI-driven surgical planning, improving alignment through precise visualization and optimizing fit for each patient.

This is crucial, as surgical outcomes across all medical fields improve with more personalized procedures and care. Carlsmed's aprevo platform leverages patient data and advanced digital technologies to achieve this. Importantly, the platform is flexible enough to support a wide range of spinal surgeries, including precise solutions for various surgical techniques and approaches for anterior, posterior, and lateral spinal surgeries.

This medical technology company recently went public. On July 22, Carlsmed announced the IPO pricing, issuing 6.7 million shares at $15 each. The new stock ticker CARL began trading on July 23, and the IPO concluded on the 24th. The company raised approximately $100.5 million in total proceeds from the initial offering.

After the IPO, Carlsmed released its first quarterly financial report as a public entity at the end of August. For the second quarter of fiscal year 2025, revenue was $12.1 million, a significant increase of 99% compared to the same period last year. The company guided for full-year revenue between $45.5 million and $47.5 million.

Goldman Sachs analyst David Roman is optimistic about the company's high potential for sales expansion: "Key growth drivers for Carlsmed include the anticipated sales team and broader commercial expansion (we forecast a 29% increase in S&M spending from 2025 to 2028), the launch of cervical indications in 2026 (expanding the surgical pool by 85%), and ongoing data releases supporting platform clinical differentiation. Our projected potential upside includes: increased surgeon adoption rates as products and clinical data gain attention in the medical community; and increased usage per surgeon as the company prepares to commercialize cervical indications applicable to the same group of surgeons."

Roman concluded: "Considering the company's differentiated technological position, Goldman Sachs' expected revenue growth trajectory, valuation comparisons among small to mid-cap medical technology companies, and the light-asset business model with an accelerated path to profitability, we believe there is significant upside potential in the current valuation."

This outlook leads to a "buy" rating for Carlsmed stock, with a one-year target price of $19 indicating a 40% increase.