Goldman Sachs International’s Co-CEOs on Europe’s Opportunity, AI, and Market Volatility

Episode Summary

Executive Summary: Goldman Sachs International co-CEOs Anthony Gutman and Kunal Shah said the Middle East conflict has created near-term volatility, but not changed their constructive view on global growth, Europe, or capital markets activity. They argue investors are still rotating toward non-U.S. assets, with differentiation by region and asset class, while dealmaking, equity issuance, and AI-driven investment remain resilient.

Main Topics: Middle East conflict and business continuity (Priority: 5/5): The speakers emphasized employee safety, client support, and maintaining a long-term commitment to the region despite heightened uncertainty and operational risk. Global equity rotation and market volatility (Priority: 5/5): They discussed how the year’s non-U.S. equity outperformance has been partially reversed by risk-off moves, a stronger dollar, energy-price concerns, and region-specific pressures, though some structural trends remain intact. Constructive macro outlook and CEO sentiment (Priority: 4/5): Anthony Gutman said business leaders remain broadly positive on growth, capital deployment, and balance-sheet strength, even as geopolitics raises near-term caution. Europe’s strategic case and integration (Priority: 4/5): Gutman argued Europe can create more prosperity if it acts as a bloc, citing signs of policy progress, deregulation momentum, and opportunities across countries and sectors. Dealmaking and capital markets remain open (Priority: 5/5): Both executives said M&A and issuance activity remain strong, with strategic transactions and large equity deals continuing despite volatility and AI uncertainty. AI as both disruption and catalyst (Priority: 4/5): Shah said markets are becoming more discerning about AI winners and losers, but investment and adoption remain strong; scale and technology adoption are driving business strategy.

Key Arguments: The Middle East conflict is serious, but Goldman sees its regional relationships and structural opportunities as durable once conditions stabilize. Market leadership has shifted: the U.S. dollar has strengthened, European stocks have retraced, and Asian markets are more mixed, but Japan and Korea remain relatively strong. Investors are increasingly distinguishing between assets directly exposed to conflict/energy shocks and those supported by longer-term structural themes. Business leaders remain positive because the starting point for the global economy is still solid: growth, balance sheets, and technology investment are supportive. Europe’s opportunity depends on acting more cohesively as a bloc, reducing regulatory burden, and advancing integration such as an investment and savings union. Even with geopolitical noise, capital markets are active; record issuance and strategic M&A show that companies are still willing to transact. AI has not stopped dealmaking; if anything, it is reinforcing the belief that scale matters and that firms must invest and compete strategically. Higher energy prices and slower growth expectations could pressure inflation and rates, but the bar for aggressive central-bank tightening remains high unless the shock persists.

Data Points: Goldman Sachs International presence in the Middle East: Teams across Abu Dhabi, Dubai, Tel Aviv, Riyadh, Doha, and Kuwait - Kunal Shah described the firm’s regional footprint and focus on employee safety Europe’s population: 450 million people - Gutman cited this as part of Europe’s capacity to matter globally Europe’s share of global GDP: roughly 15% - Used to argue Europe can be a meaningful economic bloc US growth outlook: 2.5% to 3%+ - Gutman cited this as the expected U.S. growth range if current conditions continue Spain GDP growth: 2.5% - Example of pockets of growth in Europe Poland GDP growth: 4% - Example of stronger growth pockets in Europe Software stock derating: 20% to 30% - Shah said software stocks in public markets fell as AI questions intensified Large equity issuance deal: over $5.5 billion - Gutman referenced a recent EQT/Galderma issuance as evidence of active markets QIA partnership: $25 billion - Gutman cited Goldman’s partnership with Qatar Investment Authority in the Middle East Private credit software leverage: 1x to 6x EBITDA - Shah used this to explain why credit exposure looks less risky than equity in AI-affected software Timeframe of episode recording: Thursday, March 12, 2026 - Stated in the closing disclaimer

Pivotal Quotes: "We came in with a pretty strong economic outlook." — Anthony Gutman: Explaining why CEOs remain constructive despite Middle East tensions "The market has become much more discerning on where there could be disruption, where the moats are, and what are the winners and losers from this technology." — Kunal Shah: Describing AI-driven sector rotation and investor selectivity "If Europe operates as a block, it has the opportunity to create real economic prosperity." — Anthony Gutman: Summarizing the case for deeper European integration

Implications: Expect near-term volatility, but not a collapse in risk appetite. Global investors may keep diversifying beyond the U.S., while Europe, EM, AI, and strategic M&A remain key themes as capital markets stay open.