With that in mind, the authors of the note — led by Ryan Hammond — are closely watching downward revenue revisions for signs the AI spending isn't paying off. "Today's hyperscalers will eventually be required to prove that revenues and earnings will be generated from their investments," analysts wrote. "Investors have expressed uncertainty about the return on those investments for the mega-cap tech stocks, but these stocks remain extremely popular," the analysts wrote. Goldman also points out that, according to a measure it tracks, just 5% of companies are currently using AI to produce goods and services. "Adjusting for profits of these companies, the AI capex cycle still pales in comparison to the tech bubble," the analysts wrote.

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Persons: Goldman Sachs, —, they'll, Goldman, Ryan Hammond — Organizations: Meta, Microsoft, Service, Nvidia