{"slug": "goldman-sachs-says-europe-s-grid-and-factory-suppliers-are-cashing-in-on-ai", "title": "Goldman Sachs says Europe's grid and factory suppliers are cashing in on AI", "summary": "Goldman Sachs strategists have turned bullish on European equities, citing surging hyperscaler capital expenditure that they now estimate at $754 billion for 2026. The bank argues that European industrial suppliers like Siemens Energy, Schneider Electric, and ABB are cashing in on AI infrastructure spending, as data center construction and power equipment demand soar. Goldman raised its STOXX 600 target to 660, projecting 8% total return in 2026.", "body_md": "*Goldman Sachs is telling investors that America's AI spending spree has a European return address, and it isn't showing up in software stocks.*\n\nThe firm's strategists have turned more bullish on European equities this year, and the reasoning leans hard on a number that keeps climbing: hyperscaler capital expenditure. Wall Street's consensus estimate for 2026 hyperscaler capex now sits near $527 billion, up from $465 billion at the start of the third-quarter earnings season, according to Goldman Sachs Research. Goldman's own house view runs even higher, putting total hyperscaler spending at roughly $754 billion next year, an 83% jump from 2025.\n\nThat's not a rounding error. It's a wholesale re-rating of how much Microsoft, Amazon, Google and Meta plan to pour into data centers, chips and the power to run them, and Goldman keeps having to revise the number upward every earnings season rather than down.\n\nGoldman has used that revision trend to justify raising its 12-month STOXX 600 target to 660, implying roughly 5.4% upside from the index's recent close near 626, according to Investing.com's reporting on the note. The bank also lifted its three-month and six-month targets to 640 and 645. Layer in falling interest rates and resilient corporate earnings, and Goldman now projects an 8% total return for the STOXX 600 in 2026, with earnings-per-share growth for the index revised up to 10% from the 5% Goldman was forecasting back in January.\n\nHere's the part that matters for anyone trying to trade this rather than just read about it: Goldman isn't arguing that Europe owns the AI stack. It doesn't. The chips are designed in the US, largely made in Taiwan, and the foundational models are trained by American labs. What Goldman is arguing is narrower and more mechanical. Data centers need to be built, wired and powered, and a meaningful slice of that physical supply chain sits in Germany, France and Switzerland.\n\nSiemens Energy is the clearest case. The German turbine and grid equipment maker has built a multi-year order backlog tied directly to US data center power demand, and Goldman's own research on data center electricity needs projects a 165% increase in power demand by 2030. Every hyperscale campus that gets built needs gas turbines, transformers and grid connections before it needs a single GPU switched on, and Siemens Energy sells exactly that.\n\nSchneider Electric, based outside Paris, supplies the medium and low-voltage equipment that goes inside the buildings themselves, the switchgear and power distribution units that keep server racks fed once the grid connection is made. ABB in Switzerland competes in the same niche. None of these three companies show up in headlines about the AI boom the way Nvidia does, but their order books tell the same story from the supply side.\n\nASML sits in a different lane. The Dutch lithography monopoly doesn't sell into data center construction directly, but Goldman's analysts expect the broader semiconductor equipment market to expand more than 30% in 2026 as foundries and memory makers race to keep pace with AI chip demand. ASML is the one company on this list that most investors already associate with the AI trade, which is exactly why Goldman keeps pointing to the less obvious names alongside it.\n\nThe split between chips and everything else is bigger than most people assume. Roughly a quarter of AI infrastructure spending goes to the chips themselves. The other three quarters goes to the data centers, cooling systems, networking gear and power infrastructure around them. That's the ratio that explains why an industrial equipment maker in Germany can be as levered to the AI boom as a chipmaker in California.\n\nNone of this comes without a caveat, and Goldman has been blunt about it elsewhere in its own research: tech companies may only capture about half the profit they need to fully justify the current pace of AI investment, a point Goldman's analysts raised directly in comments reported by Fortune in January. If hyperscaler capex growth decelerates from its current trajectory, the European suppliers riding this wave will feel it before the hyperscalers do, since equipment orders get cut long before cloud revenue actually slows.\n\nWatch the capex revisions each earnings season the way Goldman is watching them. The number has moved from $465 billion to $527 billion to a Goldman house estimate near $754 billion in the space of a single quarter's worth of guidance. As long as that trend keeps pointing up, Siemens Energy, Schneider Electric and their peers have a tailwind that has nothing to do with anyone in Europe actually building a competitive AI model.\n\n**Also read:** [Senate Republicans race to bring the Clarity Act to a July floor vote](https://startupfortune.com/senate-republicans-race-to-bring-the-clarity-act-to-a-july-floor-vote/) • [Abu Dhabi's MGX Closes Nearly $50 Billion to Bankroll the AI Buildout](https://startupfortune.com/abu-dhabis-mgx-closes-nearly-50-billion-to-bankroll-the-ai-buildout/) • [Lime prices its Nasdaq IPO at $25 per share as Uber bets the scooter category still has a future](https://startupfortune.com/lime-prices-its-nasdaq-ipo-at-25-per-share-as-uber-bets-the-scooter-category-still-has-a-future/)", "url": "https://wpnews.pro/news/goldman-sachs-says-europe-s-grid-and-factory-suppliers-are-cashing-in-on-ai", "canonical_source": "https://startupfortune.com/goldman-sachs-says-europes-grid-and-factory-suppliers-are-cashing-in-on-ai/", "published_at": "2026-07-01 08:35:24+00:00", "updated_at": "2026-07-01 08:52:29.233475+00:00", "lang": "en", "topics": ["ai-infrastructure", "ai-chips", "ai-research"], "entities": ["Goldman Sachs", "Siemens Energy", "Schneider Electric", "ABB", "ASML", "Microsoft", "Amazon", "Meta"], "alternates": {"html": "https://wpnews.pro/news/goldman-sachs-says-europe-s-grid-and-factory-suppliers-are-cashing-in-on-ai", "markdown": "https://wpnews.pro/news/goldman-sachs-says-europe-s-grid-and-factory-suppliers-are-cashing-in-on-ai.md", "text": "https://wpnews.pro/news/goldman-sachs-says-europe-s-grid-and-factory-suppliers-are-cashing-in-on-ai.txt", "jsonld": "https://wpnews.pro/news/goldman-sachs-says-europe-s-grid-and-factory-suppliers-are-cashing-in-on-ai.jsonld"}}