[Goldman Sachs Internal Disagreement on AI Outlook: One Warns of Peak Earnings Growth, Another Claims $1.1 Trillion in Orders Validates Investment Returns] BlockBeats reports that on November 1st, two senior strategists at Goldman Sachs offered drastically different assessments of the AI market outlook. Tony Pasquariello believes that the third-quarter earnings reports of tech giants reveal that S&P 500 earnings growth may have peaked, and market momentum is weakening, making large bets unwise at this time. London-based strategist Mark Wilson, however, believes that the combined $1.1 trillion in backlog of orders from Google Cloud and AWS clearly demonstrates that AI investment returns are being realized, maintaining a bullish stance. Wilson cited data including: Google Cloud revenue growth of 103% year-over-year, with backlog orders increasing by 256% to $561 billion; AWS revenue growth of 39%, with backlog orders increasing by 189% to $578 billion, totaling approximately $1.14 trillion in backlog orders. Wilson believes the strong growth of major global cloud service providers demonstrates that AI demand remains robust, and market skepticism about return on investment is being addressed. However, Pasquariello argues that the impressive growth in cloud services masks weakness in other core businesses. While tech giants continue to expand capital expenditures, they have failed to simultaneously demonstrate room for profit growth. He points out that S&P 500 earnings growth has shown signs of peaking, and the upward revision of forward earnings per share expectations has slowed significantly. The current core debate in the market has shifted from whether AI demand exists to how to realize returns on investment. Despite a $561 billion backlog of cloud orders, Alphabet still recorded a net outflow of $910 million in free cash flow this quarter, lower than the market expectation of a $3.5 billion net inflow. Another Goldman Sachs strategist, Rich Privorotsky, attributes the issue to "value capture": which companies in the AI value chain can truly profit, and at what cost will they need to raise capital? Meanwhile, a clear divergence emerged within the US stock market, with the S&P 500 excluding AI stocks significantly outperforming tech stocks in October. Both strategists acknowledged the unusual market volatility but disagreed on whether the AI rally could continue. [Original Link]