Goldman Sachs: Software Sector Default Recovery Potential Underestimated
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: CNBC
- Default Recovery Potential: Goldman Sachs highlights that credit-market participants may underestimate the recovery potential following defaults in the software sector, suggesting that prevailing negative views could undermine investor confidence.
- Role of Private Credit: Despite the disruption risks posed by AI, Goldman believes private credit can leverage its substantial dry powder to address potential dislocations in the financing market, thereby supporting the software industry.
- Market Dynamics Shift: In the first five months of 2023, US software buyout transactions totaled approximately $17 billion, representing only 17% of the peak in 2022, indicating ongoing pressure and a negative sentiment overhang in the industry.
- Maturity Wall Pressure: The software sector faces significant loan maturities due in 2028, yet Goldman sees resilience in areas like data infrastructure and cybersecurity, suggesting a potential for greater dispersion rather than broad deterioration in the industry.
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Analyst Views on GS
Wall Street analysts forecast GS stock price to fall
12 Analyst Rating
5 Buy
7 Hold
0 Sell
Moderate Buy
Current: 1065.090
Low
604.00
Averages
951.45
High
1100
Current: 1065.090
Low
604.00
Averages
951.45
High
1100
About GS
The Goldman Sachs Group, Inc. is a global financial institution that delivers a range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Its segments include Global Banking & Markets, Asset & Wealth Management and Platform Solutions. The Global Banking & Markets segment offers a range of services, including financing, advisory services, risk distribution, and hedging for its institutional and corporate clients. It facilitates client transactions and makes markets in fixed income, equity, currency and commodity products. The Asset & Wealth Management segment manages assets and offers investment products across all asset classes to a diverse set of clients. It also provides investing and wealth advisory solutions. The Platform Solutions segment includes consumer platforms, such as partnerships offering credit cards and point-of-sale financing, and transaction banking and other platform businesses.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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