According to CNBC, Goldman Sachs has updated its global “Conviction List – Directors’ Cut” for November, identifying five stocks with over 70% upside potential. The investment bank added Danish logistics firm DSV, Italian electrical cable company Prysmian, and UK hydrogen firm Ceres Power in Europe, while removing Atlas Copco, Repsol, and UCB. In APAC, additions included Taiwanese manufacturer Hon Hai, Korean insurer Samsung F&M, Chinese teahouse chain Guming, and India’s PTC Industries. The top five upside picks are Korean game publisher Krafton (92% upside), Swiss-French HR company Adecco Group (92%), hydrogen firm Ceres Power (79%), German online retailer Zalando (77%), and Chinese AI chip maker Horizon Robotics (74%), whose shares have surged 144% year-to-date. This strategic reshuffle reflects Goldman’s response to evolving global market conditions.
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The Strategic Sector Rotation Behind Goldman’s Picks
Goldman’s selections reveal a sophisticated sector rotation strategy that goes beyond simple stock picking. The inclusion of Horizon Robotics at 74% upside potential represents a calculated bet on the convergence of AI and automotive technology, particularly as the company expands its European presence through partnerships with Volkswagen’s software arm Cariad and ZF Group. This isn’t just about AI hype—it’s about positioning in the emerging autonomous vehicle ecosystem where hardware and software integration creates sustainable competitive advantages. Similarly, the 92% upside projection for Krafton reflects confidence in the gaming industry’s transition from one-hit wonders to sustainable franchise models, despite the company’s recent quarterly volatility.
European Transformation Plays With Global Implications
The European additions tell a compelling story about regional transformation. Ceres Power’s 79% upside projection isn’t merely about hydrogen technology—it’s about the company’s strategic positioning in the data center power revolution. As AI-driven computing demands explode, traditional power solutions become inadequate, creating a massive market for fuel cell technology. The partnership with Shell demonstrates how legacy energy companies are diversifying into next-generation power solutions. Meanwhile, Zalando’s 77% upside potential reflects Goldman’s confidence in European e-commerce consolidation following its strategic acquisition of About You. This move creates scale advantages that could challenge Amazon’s European dominance, particularly in fashion retail where localized curation matters.
The Asian Emerging Market Calculus
Goldman’s APAC selections reveal a nuanced approach to emerging markets beyond simple growth stories. The inclusion of companies like India’s PTC Industries and China’s Guming represents bets on domestic consumption growth and manufacturing sophistication. More importantly, the bank appears to be positioning for supply chain diversification away from China while maintaining exposure to Asian growth dynamics. The removal of several Chinese companies (Anta, Zai Lab) alongside additions of others (Guming, Horizon Robotics) suggests a highly selective approach to China exposure, focusing on companies with global competitive advantages rather than domestic market plays. This aligns with broader institutional sentiment favoring companies that can thrive despite geopolitical tensions and trade restrictions.
The Reality Check: Upside Potential vs. Execution Risk
While the projected returns are attention-grabbing, investors should consider the execution risks behind these optimistic projections. Horizon Robotics’ 144% year-to-date surge creates valuation concerns, and the company faces intense competition from established semiconductor players and well-funded startups. Similarly, Adecco Group’s projected 92% upside comes despite declining revenues and pending quarterly earnings, suggesting Goldman is betting heavily on operational turnaround and dividend policy changes. The hydrogen sector, including Ceres Power, remains capital-intensive with uncertain regulatory support timelines. Investors should view these projections as best-case scenarios that depend on flawless execution and favorable market conditions across multiple quarters.
Strategic Implications for Portfolio Construction
For institutional and individual investors alike, Goldman’s updated conviction list provides valuable insights into global capital allocation trends. The selections emphasize technology-enabled transformation across traditional industries rather than pure tech plays. This suggests a maturation in investment philosophy where digital transformation, energy transition, and supply chain evolution create opportunities in seemingly mature sectors. The geographic diversification—spanning Europe, Asia, and emerging markets—also reflects concerns about U.S. market concentration and valuation extremes. As the dollar weakens, as mentioned in the source material, these international picks offer currency diversification benefits alongside fundamental growth stories, creating a compelling case for global portfolio rebalancing.
