The hottest trading themes in the US stock market in 2024 have been revealed: AI and weight loss drugs are equally popular.

Zhitong App learned that Goldman Sachs, a major Wall Street bank, recently released a report stating that the overall performance of the US economy seems to be good after the end of the Federal Reserve's interest rate hike cycle, especially the performance of the US stock market in 2023 far exceeded expectations. Goldman Sachs strategists expect this favorable situation to continue in 2024.

Goldman Sachs strategists said on Tuesday that the growth prospects of the US economy look quite clear, and they agree with the decline in US Treasury yields, the Federal Reserve's upcoming shift to a looser monetary policy, and GDP growth rates higher than market expectations.

By the end of December 2023, Goldman Sachs strategists raised their forecast by nearly 9% from the mid-November level of 4,700 points. In its December report, Goldman Sachs predicted that by the end of 2024, the S&P 500 index would reach 5,100 points, higher than the institution's previous forecast of 4,700 points.

Looking ahead to the whole year of 2024, Goldman Sachs strategists suggested that investors should continue to pay attention to these seven hot trading themes that may affect the trend of US stocks.

Here are the seven trading themes that this Wall Street financial giant expects to have a major impact on the main trends of US stocks in the next 12 months, covering a range from generative artificial intelligence to weight loss drugs, and from green energy spending to reshoring manufacturing to the United States.

1. Generative Artificial Intelligence

Goldman Sachs expects that generative artificial intelligence technology and the related innovations it brings will ultimately significantly improve productivity and potentially increase the annual GDP growth rate of the United States by 0.4%. Goldman Sachs strategists stated in the report, "For companies that can provide computing power and platforms to support the development of artificial intelligence, AI may bring tremendous productivity prosperity."

As AI technology continues to advance and integrate with applications, companies around the world are racing to deploy advanced technologies represented by generative artificial intelligence, helping companies empower new businesses and optimize decision-making processes and operational efficiency, thereby giving rise to more diverse and customized demands for artificial intelligence. The latest forecast data from IDC shows that the global investment in AI IT technology is expected to reach $128.8 billion in 2022 and is projected to increase to $423.6 billion in 2027, with a five-year compound annual growth rate (CAGR) of approximately 26.9%.

According to a research report by Zacks Investment Research, 2023 is a crucial year for the AI industry, accompanied by major hardware GPU product launches by NVIDIA and AMD, as well as various investments and strategic acquisitions. Looking ahead to 2024, Zacks Investment predicts that further development of AI technology will drive consumer hardware upgrades and new AI-based software services, such as AI-powered personal computers and other terminal devices equipped with AI chips, as well as software applications with new AI technologies embedded, such as chatbots. Goldman Sachs predicts that artificial intelligence (AI) will contribute 0.1 percentage points to the United States' Gross Domestic Product (GDP) growth rate in 2027, and accelerate to 0.4 percentage points in 2034. Goldman Sachs also notes that under the influence of AI, the expected growth rate of the US GDP in 2027 has been revised to 2%, and the forecast for the growth rate in 2034 has been revised to 2.3%.

Goldman Sachs recommends stocks related to this trading theme, including Amazon (AMZN.US) and NVIDIA (NVDA.US).

2. Weight Loss Pills

Goldman Sachs states that the "weight loss pills" trading theme emerged in 2023 and has gained popularity on par with AI, sparking a market frenzy. The enthusiasm for weight loss pills will be a major theme that US stock investors will continue to focus on this year.

Last year, due to the popularity of its weight loss products, the stock price of US pharmaceutical giant Eli Lilly (LLY.US) rose nearly 60%, making it the ninth-largest company in the S&P 500 index and one of the major winners in the global stock market in 2023.

Goldman Sachs states that in 2024, the competitors of the global weight loss pill giants, Novo Nordisk and Eli Lilly, will launch similar drugs to address obesity and its related issues. Therefore, Goldman Sachs expects the demand for weight loss drugs with GLP-1 components to remain a key trend worth paying attention to.

In 2023, two "miracle weight loss drugs" produced by Danish pharmaceutical giant Novo Nordisk, Ozempic and Wegovy (both containing semaglutide as the active ingredient), became synonymous with the global stock market's speculation on weight loss pills. Analysts at Goldman Sachs predict that by 2030, the annual sales of the global anti-obesity drug market may increase to around $100 billion, while the annual sales in early 2023 were only $6 billion. The World Obesity Federation (WOF) estimates that by 2035, over 4 billion people (more than half of the world's population) may suffer from varying degrees of obesity.

3. Green Energy Expenditure

Goldman Sachs strategists wrote in the report, "The necessity of global climate change mitigation is becoming increasingly apparent. As governments around the world encourage a new wave of green energy development to transition from fossil fuels to renewable energy, green energy companies are responding to emerging opportunities."

Goldman Sachs states that companies in the solar energy industry, companies extracting methane gas from waste, and nuclear energy companies may benefit from this trend. First Solar (FSLR.US), Republic Services (RSG.US), and Southern Company (SOJC.US) are listed by Goldman Sachs as stocks worth watching. 4. Private Credit

Goldman Sachs stated that some investors expect higher returns from private debt transactions than from the public trading market, and retail products offered by asset management companies have gained relative attractiveness in the past year.

Goldman Sachs strategists pointed out, "Insurance companies are increasingly allocating funds to the private credit market, creating a reliable and large source of capital for this market."

Regarding this trading theme, Goldman Sachs stated that Blue Owl Capital (OWL.US) stocks may benefit from this trading theme.

5. "Echo Boom" after the COVID-19 Pandemic

As the world gradually adapts to the new normal after the COVID-19 pandemic in the past few years, this trading theme may be in its final stage.

After experiencing years of anomalies during the COVID-19 era, several industries such as transportation and tourism are still undergoing adjustments. However, Goldman Sachs strategists stated that two notable industries are finance and technology, which respectively recovered from regional banking crises and the bursting of the technology bubble in 2023 and 2021. "Entering 2024, the tone seems to be changing," the strategists said. Goldman Sachs stated that the pace of corporate hiring seems to be accelerating, especially in software companies, followed by an acceleration in the industry's expansion.

The latest corporate spending report released by Piper Sandler shows that US companies are increasingly focusing on AI-related software and hardware expenditures, with the proportion of companies intending to spend reaching 62%, doubling from last year's 31%. According to a research report by InvestorPlace, 2024 will be a year of explosive growth in AI application software, with hundreds of new AI-based innovative applications expected to be widely disseminated in society. InvestorPlace predicts that by 2025, we will be in the midst of a wave of comprehensive emergence of AI software.

Goldman Sachs stated that stocks related to this theme include Amazon, OKTA (OKTA.US), JB Hunt (JBHT.US), Textron (TXT.US), JPMorgan Chase (JPM.US), and Jefferies Financial Group (JEF.US).

6. Reshoring of Manufacturing to the United States

Goldman Sachs stated that climate change, a series of chain reactions caused by the COVID-19 pandemic, and the trend of deglobalization will contribute to the revival and reshoring trend of the US manufacturing industry.

More manufacturing projects will reshore to the United States this year. Goldman Sachs predicts that by 2030, the reshoring trend in the semiconductor, electric vehicle, and charging station sectors in the United States may collectively drive up to $600 billion in incremental capital expenditures.

Goldman Sachs stated that stocks related to this theme include NVIDIA, Cintas (CTAS.US), TE Connectivity (TEL.US), First Solar, JB Hunt, Parker-Hannifin (PH.US), and PPG Industries (PPG.US). 7. More mature internet growth and blurred business models

Finally, Goldman Sachs has stated that compared to 10 years ago, the growth pace of internet technology companies is moving towards maturity. The global economic growth is slowing down, which prompts businesses to explore new areas and sub-industries in order to maintain expansion trends.

Goldman Sachs strategists have stated that this has led to "an exploration that may blur the operational boundaries between advertising and commerce, consumer habits, and overall consumer behavior within the scale ecosystem."

Goldman Sachs has mentioned that Amazon is one of the thriving companies in this field, and WW International (WW.US) and Constellation Brands (STZ.US) are also expected to participate in this thematic trading trend.