Goldman Sachs highlights tech stocks with upside ahead of earnings

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Tech stocks with upside ahead

Highlights

Goldman Sachs maintains a bullish stance on Microsoft ahead of its October 28 earnings report, citing robust AI platform strengths and capital expenditure flexibility.
Goldman upgraded Zeta Global to buy despite a 67% share price rise this year, citing enterprise share gains and ongoing demand for its AI-driven marketing platform.
Goldman remains positive on Alphabet and Palantir, citing confidence in Alphabet's AI strategy and Palantir's continued U.S. government contract wins amid digital modernization.

Analyst picks before key earnings reports

As reported by CNBC, Goldman Sachs is telling clients there are still multiple buy-rated technology stocks worth owning ahead of upcoming quarterly earnings, with Microsoft among the firms it sees as having further room to rise.

Analyst Gabriela Borges says Microsoft has several strengths going into its October 28 earnings report, including what Goldman views as the breadth and depth of its AI platform, along with Azure unit economics and return on invested capital. Goldman also points to the company’s capital expenditure flexibility and robust consumer demand for AI products and services, while calling Microsoft the software name in its coverage best positioned to benefit from compounding AI product cycles.

Microsoft shares are up more than 8% this year, trailing the more than 11% gain in the S&P 500. Goldman nevertheless maintains a constructive view on the stock ahead of results.

Zeta Global is another name the bank favors after recently upgrading the marketing technology company to buy from neutral. Analyst Callie Valenti says Zeta is benefiting from enterprise share gains as customers modernize legacy marketing platforms and consolidate fragmented data, intelligence and activation tools.

Goldman says that even after a 67% rise in the shares this year, Zeta still has additional upside ahead of its next scheduled earnings report in November. The bank adds that its industry conversations indicate enterprises are prioritizing AI investments and reassessing existing software budgets, a trend it believes should support demand for Zeta’s broader platform and consumer data capabilities.

AI positioning and enterprise spending remain central themes

Goldman is also staying positive on Alphabet before earnings next Wednesday. Analyst Eric Sheridan acknowledges investor concerns around Search revenue growth, the lack so far of a formal consumer agent launch, and how the company may be positioned if user behavior shifts toward agentic interfaces, but he argues those worries are largely overdone.

Sheridan says investors should remain patient and continue buying Alphabet shares, which are up only 2% this year. Goldman adds that confidence in Alphabet’s AI strategy and its ability to build consumer applications could provide catalysts for a more constructive near-term market narrative.

Palantir also remains on Goldman’s list of favored names. The bank says agreements with the U.S. government can act as a growth driver as Department of Defense modernization accelerates, signaling that Palantir is moving deeper into mission-critical workflows as legacy systems are updated and the use of commercial software and AI expands.

In our earlier coverage of the S&P 500’s push toward 8,000, we highlighted how the market’s midsummer rally was heavily driven by AI-linked megacaps heading into a crucial third-quarter earnings season. The piece noted that higher oil prices, elevated Treasury yields, and election-related uncertainty were raising the bar for results, while narrow market breadth and concentration risk increased the index’s vulnerability if key leaders disappoint.

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