Goldman Sachs: AI risks are intensifying the debate on stock valuations.

Strategists at Goldman Sachs Group say that the disruptive risks brought by artificial intelligence are intensifying the debate on stock valuations in the market. The team led by Ryan Hammond believes that "Investors' perception of AI disruption threats makes them pay closer attention to the 'terminal value' of many stocks." Their analysis based on a 10-year dividend discount model shows that "the terminal value of the S&P 500 index currently accounts for about 75% of its overall equity value, close to the highest level in the last 25 years." The strategists specifically mentioned the recent decline in performance of software stocks and other "light asset" industries. "For stocks with high value concentrated in the distant future, the significant decline in recent stock prices contrasts sharply with strong short-term earnings, further highlighting the importance of long-term growth prospects."