Goldman Sachs tackled the “most important question for the U.S. equity market outlook” on Monday: whether the market is “correctly valuing the benefits from AI.” The answer is a qualified yes, a denial that company valuations are at “bubble levels,” and a finding that the market is, shall we say, excessively optimistic.

The U.S. equity market may have already incorporated a significant amount of the potential long-term value generated by AI, according to a new analysis from the investment bank. Some “simple arithmetic,” analysts Dominic Wilson and Vickie Chang write, suggests market pricing for AI gains is running “well ahead of the macro impact,” with the valuation surge in AI-related companies approaching the upper limits of plausible economy-wide benefits.

While Goldman’s portfolio st

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