Microsoft joins, Broadcom exits Goldman's top-stocks list

Investing.com -- Goldman Sachs reshuffled its U.S. Conviction List in its August update, adding Microsoft and five other names while removing Broadcom and three others.

In a note to clients, the firm highlighted what it sees as "Stocks for a broadening market," adding Applied Materials, Delta Air Lines, Microsoft, O'Reilly Automotive, Viking Holdings and United Parcel Service.

It removed Broadcom, Dick's Sporting Goods, Johnson & Johnson and ServiceNow.

On Microsoft, analyst Gabriela Borges highlighted the company's position as the AI revolution shifts from training and infrastructure toward "the early stages of 'how to make AI work in enterprises.'"

She said June-quarter results marked a meaningful step in reversing a period of underperformance, with Azure acceleration, improving AI unit economics and Copilot monetization, and expects EPS growth to accelerate from 12% in fiscal 2027 to more than 20% by fiscal 2029.

Meanwhile, Goldman believes Applied Materials is well-positioned to gain share at top DRAM makers and leading foundries, given its exposure to deposition and etch tools.

On Delta, the firm sees the carrier "best positioned to capitalize on the industry's newfound pricing power," calling for 300 basis points of margin expansion over two years.

The bank also flagged O'Reilly's share gains in the "Do it for Me" market, a revenue and profit inflection at UPS after three years of erosion, and Viking's differentiated geographic exposure and higher-income customer base, which analyst Lizzie Dove believes should "more than offset a choppier cruise environment."

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