Benzinga·2025-10-20 11:43Core Insights - Goldman Sachs recommends investors focus on Chinese companies expanding internationally, driven by a weaker yuan, cost advantages, and China's robust global supply chains as growth catalysts [1] Group 1: Investment Opportunities - Goldman Sachs identified 25 top picks, including Alibaba Group Holding Ltd, Contemporary Amperex Technology Co Ltd, and BYD Co Ltd, as key beneficiaries of the "going global" trend [1] - These companies, spanning e-commerce, capital goods, and healthcare, have gained nearly 40% year-to-date, outperforming the Hang Seng Index's 29% and the CSI 300 Index's 16% rise [2] Group 2: Earnings Growth Projections - The bank expects overseas expansion to accelerate earnings growth by about 1.5% annually through 2028 as firms diversify beyond China's saturated domestic market [3] - Alibaba's overseas revenue doubled to 13% in 2023 from 7% in 2021, while CATL's increased to 30% from 21%, indicating rising global competitiveness [3] Group 3: Market Dynamics and Risks - Goldman acknowledged that potential 100% U.S. tariffs under Trump's trade agenda could reduce short-term profits by around 10%, but international diversification should mitigate this impact over time [4] Group 4: Alibaba's Performance and Projections - Alibaba's stock gained 97% year-to-date, significantly outperforming the NYSE Composite index's over 12% returns, driven by its cloud unit and AI model integration [5] - Goldman Sachs raised its cloud revenue growth forecasts to 31–38% through fiscal 2028, citing advancements in multimodal AI models and a diversified chip supply [6] - Daiwa Securities projected Alibaba Cloud revenue to climb 30% year-over-year in the second quarter of fiscal 2026, with operating losses expected to peak soon [7]