Connecting the Dots Beach reading & listening plus key research

Equity Research 14 August 2026 | 9:01PM BST

Beach reading & listening plus key research

We will be taking a summer break next week from Connecting the Dots. We hope Sahar Islam | you have had / will have some time to recharge. If you are looking for some Goldman Sachs International reading and listening material, see below.

Market rotations / performance breakdown

Momentum, rotation and the value in growth. Peter Oppenheimer explores the broadening of the opportunity set across different lenses (geographic, market cap, factors). Industrials now trade at a higher valuation than Technology (Exhibit 10). On Technology, he says: “there does not appear to be a valuation bubble, but there may be an earnings bubble. Investors have reflected these concerns and there is Value that is emerging.”

Europe – The secret outperformer. Sharon Bell discusses why Europe is in fact growing (Exhibits 1-2), is markedly improving ROE (Exhibit 3), has outperformed the US despite a few shocks (energy, tariffs) since 2025 (Exhibits 5-6) and more. There are some great charts for European focused investors (or global ones diversifying).

E&P: The beginning of a new oil capex upcycle: Back to the 2000s. Michele della Vigna highlights why the sector is poised for a major upcycle with reserve life down 65% for Top Projects since 2013 (i.e., pre the shale revolution). US shale is flattening out and there is a lot of capacity in geopolitically challenging areas.

TGS is on the CL, but also worth looking into UK industrials such as… Smiths Group (SMIN.L): Buyback supports earnings ahead of a potential O&G capex recovery: reinstate at Buy; it offers 40% O&G exposure via John Crane. Christian Hinderaker thinks the new portfolio profile (post disposals) should warrant a c.18x 12m fwd EV/EBIT vs. the historical 13x median given the higher ROIC. It is also returning >30% of its market cap which should provide some downside protection.

European Software: Assessing moats, business models, and valuations in the Agentic era. Mo Moawalla sees AI as redistributing value across the stack and

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs Connecting the Dots

assesses moats. Exhibit 2 maps out the competing visions of the different stacks. Also see Exhibit 3: Enterprise AI is likely to rely on orchestrated agents rather than a single frontier model and Exhibit 8: falling token costs will likely result in greater use of token-intensive applications.

Powering Up Europe: Who pays for Electrification and Artificial Intelligence? Alberto Gandolfi discusses why electricity bill increases over the next decade will be much lower than anticipated, easing concerns over affordability. He estimates 35-40% electrification capex is non-inflationary (e.g., power grids’ maintenance) or deflationary (e.g. onshore renewables like in Spain).

China Data Centers: The rise of Ulanqab as one of APAC’s largest and fastest growing AI computing clusters. Timothy Zhao highlights China’s expansion plans including Ulanqab in Inner Mongolia which has received 12.5 GW of commitment as of June, implying 10x capacity expansion as of 2025. It is a useful case study on what matters for data centers (low temperature, electricity price is low, and it has wind / solar combined with a sustainable energy grid). Exhibits 3 and 4 show the overall picture of China’s DC clusters and plans to almost double live capacity from 2025 to 2030.

DSV A/S (DSV.CO): Q2 recap, and what’s required in H2 to restore confidence. Patrick Creuset outlines why extrapolating the depressed Road profitability in 2Q is unrealistic (Buy, on Conviction List).

On the Road with Goldman Sachs - European Edition: What we learned on why talent is driving different AI…