Thapana Onphalai
Goldman Sachs expects capex and R&D growth to slow to 7% this year, down from 10% in 2023.
Higher “interest rates have led to a higher cost of capital for firms, making it unlikely that capex growth will accelerate in the near term,” strategist David Kostin said.
“Sales growth is the largest driver of R&D growth in our model and we forecast sales will grow by 6%,” Kostin said.
“The AI investment cycle among the mega-cap tech stocks will support investing for growth,” he added. “After several quarters of cost discipline, many mega-cap tech firms appear committed to investing in AI.”
“Ten stocks in the S&P 500 index collectively accounted for 54% of total R&D spending in 2023 and the ten firms with the largest capex spending accounted for 29% of total capex.”
The top 10 for 2023 Capex
- Amazon (AMZN) $53 billion, 6% of S&P
- Microsoft (MSFT) 35, 4
- Alphabet (GOOGL) 32, 3
- Meta Platforms (META) 27, 3
- Intel (INTC) 26, 3
- GM (GM) 25, 3
- Exxon Mobil (XOM) 22, 2
- Walmart (WMT) 21, 2
- Berkshire Hathaway (BRK.B) 19, 2
- Verizon (VZ) 19, 2
The top 10 for 2023 R&D
- Amazon (AMZN) $86 billion, 15% of S&P
- Alphabet (GOOGL) 45, 8
- Meta Platforms (META) 38, 7
- Merck (MRK) 31, 5
- Apple (AAPL) 30, 5
- Microsoft (MSFT) 28, 5
- Intel (INTC) 16, 3
- J&J (JNJ) 15, 3
- Eli Lilly (LLY) 13, 2
- Pfizer (PFE) 13, 2
The Goldman Capex and R&D Basket
Communication Services
- Charter Communications (CHTR) Capex+R&D/Market Cap 21%
- Meta Platforms (META), 21%
- AT&T (T), 14%
- Verizon (VZ) 11%
- Comcast (CMCSA), 8%
- Electronic Arts (EA), 8%
Industrials
- United Airlines (UAL), 58%
- American Airlines (AAL), 31%
- Delta Air Lines (DAL), 25%
- Southwest Airlines (LUV), 25%
- United Rentals (URI), 17%
Info Tech
- Intel (INTC), 38%
- Hewlett Packard (HPE), 24%
- Western Digital (WDC), 23%
- Micron Technology (MU), 19%
- Juniper Networks (JNPR), 13%
- Jabil (JBL), 11%
- First Solar (FSLR), 10%
- Super Micro Computer (SMCI), 9%
- NetApp (NTAP), 9%
- Qorvo (QRVO), 9%
- Seagate Tech (STX), 9%
- Akamai (AKAM), 9%
- Qualcomm (QCOM), 8%
- HP (HPQ), 8%
- On Semiconductor (ON), 8%
- NXP Semiconductors (NXPI), 8%
Consumer Discretionary
- GM (GM), 73%
- Norwegian Cruise Line (NCLH), 53%
- Ford (F), 35%
- Carnival (CCL), 32%
- Royal Caribbean (RCL), 31%
- Borg Warner (BWA), 16%
Consumer Staples
- Kroger (KR), 12%
- Tyson Foods (TSN), 8%
- Bunge Global (BG), 8%
- Lamb Weston (LW), 8%
Energy
- Diamondback Energy (FANG), 19%
- EQT (EQT), 16%
- APA (APA), 16%
Utilities
Healthcare
- Merck (MRK), 12%
- Viatris (VRTS), 10%
- Incite (INCY), 9%
- DaVita (DVA), 8%
- Moderna (MRNA), 8%
- Bristol-Myers (BMY), 8%
- Universal Health (UHS), 7%
Materials
- Eastman Chemical (EMN), 11%
