GS Miller Global Reflections AI trade recouped Monday losses

GS Miller - Global Reflections AI trade recouped Monday losses 18 Sep 2026 Louis Miller · Goldman Sachs · Managing Director · Global Banking & Markets Fri 18 Sep 2026, 5:21pm ET

The AI trade recouped almost all of its Monday losses and we think incremental use-case materialization will create scope for alpha on the long and sh

The AI trade recouped almost all of its Monday losses and we think incremental use-case materialization will create scope for alpha on the long and short side. Momentum is on the precipice of a breakout and, while we might sound the boy who cried baskets, we like buying AI here.

The Fed meeting reinforced credibility and a more anchored long end has helped risk appetite. While the road ahead will be choppy, we're convicted the path from here to year-end is higher in equities and like picking up exposure in oversold, undervalued structural growth. With Trump/Xi meeting next week, we also think there’s room for recovery in Consumer pockets and like Healthcare as an uncorrelated macro trade. We had Finn Dattenberg Doyle (Asia Baskets) in town in NY, his top Asia trades are featured in the fourth chart below and the one year floored swap on GSCB300P stands out here. Dispersion across Europe is also creating interesting opportunities. Five key points:

Consumer agents are here, short GSXUSWCH. Muse had 1.6 million US downloads in its first 8 days (nearly 2x ChatGPT's first 8 days) according to Apptopia, and the impact of Instinct on making my personal inbox easier to manage was the first conversation I had today. This phenomenon is exactly why we like being short Consumer Inertia (GSXUSWCH). GSXUSWCH focuses on industries where customer stickiness is driven less by product differentiation and more by the effort required to take action. Telcos traded down on this theme on Thursday (TMUS -5.5%; AT&T -2% & VZ -3%), but our basket cuts across more areas, and we also have a version ex fins (GSCBSWC2 Index) for those that think it adds too much macro sensitivity. Power is now the laggard trade in an AI rally, leaving room for upside. AI has nearly closed the gap since AI regulation/pause concerns drove the complex lower, but power continues to lag. While energy inflation and the scope for regulatory intervention have weighed on the IPP and AI power theme (GSX1POW1), we think we are approaching an inflection point: positioning in the AI power story is amongst the most washed out across AI themes, the upcoming midterms should be supportive of the renewable power narrative, and datacenter power demand remains intact. We’re also particularly bullish on Europe’s power story, where headlines on datacenter rollout are accelerating (see Fortum/Google, PPC/AWS) and like owning Renewables (GSXERNEW) as the value-growth pocket within Utilities geared to energy price upside near-term and datacenter upside longer-term. Buy calls on US Consumer, Short Delta One UK Consumer. Across the pond, stretched UK yields (10y at 20y high) have hit Homebuilders (GSSBUKHO) which offer the highest beta expression for UK rates relief. In contrast to Homebuilders, UK Consumer stocks (GSXEUKCO) have been remarkably resilient YTD, but are vulnerable to correction as discretionary spend weakens. In contrast in the US, we like going long Low

Income Consumer Discretionary (GSXULOWD), which has held up better than broader consumer, if we get any relief on the geopolitics front. Germany > France. Our Europe Team like broader exposure to German fiscal stimulus via our fiscal spend basket (GSXEGFSC) where performance decorrelated from positive EPS and economic sentiment trends. GS is hosting its annual German corporate conference next week (Sep 21-23) where these companies will discuss how fiscal spend is flowing through orders and EPS momentum. Note that planned 2027 German defense expenditure of €140bn represents a €31.4bn increase from 2026. We like pairing this with a tactical short hedge on our French Domestic basket (GSXEFRDO), which we expect to remain constrained by political and fiscal noise into next year's elections. Winners need better hedges into Year-End. Even with the summer’s drawdowns, many names are up double and even triple digits YTD…