Goldman Sachs is telling investors to take a breath. Peter Oppenheimer, the bank’s chief global equity strategist, has told investors today that markets aren’t crashing—just cooling.
“In our view, this is a correction and not the start of a sustained bear market,” Oppenheimer told clients in a 16-page note titled Concentration Correction – What to Do Next, released on Jan. 29.
The report comes as tech stocks, led by the Magnificent Seven—think Apple, Microsoft, Google, and their mega-cap friends—take a hit after DeepSeek’s debut. But Goldman isn’t seeing doom. They see an opportunity.
Goldman bets on diversification as crypto bleeds
Oppenheimer pointed out that the tech sector’s dominance isn’t irrational hype. “It’s backed by fundamentals,” he wrote, pointing to massive profit gains compared to other sectors. But he also warned that investors shouldn’t stick only to tech.
“We’re not in a period where everything that’s outperformed will crash,” he said. Instead, he expects “market broadening,” a move where investors look at other areas of growth while holding their key positions in winners like Big Tech.
Goldman is advising clients to keep holding stocks but to hedge their bets. The bank recommends diversifying into assets like safe bonds and mid-sized U.S. stocks through indices like the SP Midcap 400 and the SP 500 Equal-Weighted Index.
“Global growth names outside tech are cheaper and more diversified,” Oppenheimer noted. He believes these names could benefit from investors looking to reduce risk but still chase returns.
Meanwhile, DeepSeek also wreaked havoc on crypto markets. The price of bitcoin has dropped to $98,000 at one point but has since recovered back above $103,000 as of press time.
On Jan. 27, Nasdaq futures dropped 3%, dragging crypto down with it. Shares of Coinbase fell 6%, while MicroStrategy slid 1%. Core Scientific and Terawulf each saw their stocks plunge 29%, and Iren (formerly Iris Energy) dropped 24%.
DeepSeek claims its AI model rivals those of U.S. tech giants like Google and OpenAI—but at a fraction of the cost. That claim is spooking investors, with fears that Big Tech’s spending on AI models and data centers could take a hit.
Standard Chartered’s Geoff Kendrick explained the risks in a note on Monday: “Today’s 3% decline in Nasdaq futures (on DeepSeek news) has driven digital asset liquidation overnight.”
According to Geoff, bitcoin’s fate remains tied to tech’s performance. “Bitcoin is much more correlated to the Nasdaq than to gold,” he said.
Data from Coinglass shows over $250 million in long Bitcoin positions were liquidated in just 24 hours. Traders who used leverage to bet on rising prices were forced to sell their assets to cover losses as prices tanked.
The market sell-off is also tied to President Donald Trump’s executive order on crypto, issued last Thursday. The order had been hyped for weeks, with traders expecting a pro-crypto policy. But the actual details disappointed some.
Instead of committing to regularly buying bitcoin (a “reserve” strategy), Trump’s order focused on creating a stockpile. This means the U.S. government will hold on to its current Bitcoin but won’t actively buy more.
Bitcoin had hit a record $109,000 last week in anticipation of the order. But once traders saw the details, the hype evaporated. At press time, BTC was worth $104,149.
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