Goldman Sachs Trading Desk: The AI intelligent agent revolution has arrived, and US stocks may be poised for a new breakthrough.

Rich Privorotsky, head of Goldman Sachs' One-Delta trading desk, believes the market is on the verge of a new breakout for the S&P 500 and Nasdaq indices, driven by profound productivity changes brought about by AI-powered intelligent agents.

In its latest report, Privorotsky points out that despite unfavorable seasonal factors, high real interest rates, and lingering geopolitical tail risks, the current market sentiment and cautious positioning themselves constitute upside potential.

He stated, "People tend to be less involved in these kinds of market movements because everyone is busy in September trying to explain why it's not taking off."

In his view, the truly noteworthy variable is the accelerated adoption of agentic AI. He stated that this trend will "fundamentally reduce friction between people, technology, and capital," with a macroeconomic effect of structural deflation, and equity assets are the most direct tool for capturing this transformation.

Currently, negative market factors have been fully priced in, and low positioning suggests upside potential.

Privorotsky begins with the concept of the "Wall of Worry," outlining the factors currently suppressing market sentiment: the rapid shift in the AI narrative, widespread caution in positioning and sentiment, the midterm elections, and the triple disruptions caused by oil prices and interest rates. He argues that these risks have already been fully priced in or even over-digested by the market.

He acknowledged that we are currently in the most unfavorable half-month window in terms of seasonality, with real interest rates still relatively high and geopolitical risks objectively present.

However, in his analytical framework, these factors are precisely the root cause of the market's "low position and low participation," rather than the decisive obstacle to market trends.

AI-powered intelligent agents: eliminating friction and unlocking productivity dividends.

Privorotsky focuses his argument on the "Inference Economy" and the large-scale adoption of AI-powered intelligent agents.

Using Muse as an example, he pointed out that this is not the end, but the beginning of a large number of similar products entering the market, and its impact will profoundly change the way individuals and enterprises produce, and even the underlying logic of communication and transactions.

He stated that AI super users already possessed similar capabilities, but the high technical barriers and maintenance costs made them difficult for ordinary users to use out of the box. This situation is changing as large enterprises assume the underlying responsibility for security, infrastructure, and distribution, and "a significant amount of friction and rent-taking will disappear from the economy."

In his view, this is itself a productivity leap—capital is reallocated to more efficient directions, and the "ineffective frictions" that hinder economic growth dissipate accordingly. His overall assessment of this trend is that it will have a positive impact on the overall equity market and will have structural deflationary characteristics.

The CPU industry chain is the most direct beneficiary, but the trend of benefit diffusion has already emerged.

Privorotsky points out that the most dramatic performance of the inference economy is currently concentrated in the CPU industry chain, but he expects market judgments to eventually become broader rather than focused.

He believes that the traditional AI capital expenditure industry chain also has investment value, but its elasticity (beta) is relatively low, while the productivity dividend will spread to a wider range of industries.

He specifically highlighted TSMC's stock performance—its price is currently high and poised for a breakout—viewing it as a signal from the global hardware "mothership." At the same time, he observed a noteworthy divergence: the financial sector weakened significantly while tech stocks strengthened, indicating a second-order effect is emerging.

In summary, Privorotsky concludes that an agency revolution has arrived, and the market is beginning to price in a major structural shift, with the strong buying in the technology and semiconductor sectors directly reflecting this expectation.

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