GOLDMAN SACHS: Companies are staring down a battle with higher rates - here are 5 ways they can win

Goldman is referring to the type of merger and acquisition (M&A) activity that "improves existing revenue streams or offers access to new markets."

And the firm says conditions are ripe for M&A right now, with the ratio of cash-to-assets for S&P 500 companies sitting at a record high. Goldman also notes tax reform will bring a flood of cash into the US from overseas — money that companies should put to work.

Goldman is particularly keen on emerging markets (EM), which account for just 14% of S&P 500 sales, thereby representing a massive area of opportunity.

The firm highlights its proprietary current activity indicator (CAI), which it notes is roughly 2 percentage points higher than the US version.

"EM is early in the cycle, and therefore presents an opportunity for incremental growth," said Kostin.

Goldman says these changes should include investment in technological innovation — like artificial intelligence or automation.

The firm notes this strategy is particularly important, since inflation will be rising as the Fed hikes rates, which could put additional pressure on margins.