Ceres Power and Rheinmetall top Goldman Sachs' August European picks as the bank highlights AI, defense and infrastructure-linked names even with the Stoxx 600 at record highs.
Goldman Sachs said Ceres Power and Rheinmetall are its two highest-upside European stock picks for the next 12 months, with projected gains of 168% and 102% respectively. The August call comes as European equities trade at record levels, with the Stoxx 600 touching a new high and closing up 0.7% at 656.86 points, leaving the benchmark up 10% in 2026. Ceres Power, a UK clean energy developer, led the bank's list after its shares fell more than 31% last month amid investor concerns about supply chains, execution and the durability of AI demand. Goldman analysts said the selloff created an entry point, citing the company's licensing model and exposure to data center growth. Rheinmetall ranked second after gaining 15.1% in July and posting stronger-than-expected preliminary second-quarter figures, including revenue of about 3.289 billion euros and operating profit of 562 million euros versus expectations of nearly 470 million. Goldman said the German defense contractor remains sharply undervalued as Europe rearms. The bank also sees 64% upside for BT Group and DSV, pointing to BT's fiber monetization and DSV's integration of DB Schenker, although DSV shares fell 9.3% in July. ASML was one of three additions to Goldman Sachs' monthly European Conviction Directors' Cut list, with analysts projecting 52% upside and arguing that AI-driven chip demand is supported by ASML's diversified revenue base across the semiconductor value chain. Rheinmetall's detailed first-half results due on Thursday are the next key test of whether earnings momentum can support the bank's valuation case.