The S&P 500 Is Forecast to Climb as Earnings Growth Powers Stocks Higher

Investment Banking FICC and Equities Marquee Transaction Banking Asset Management Private Wealth Management Private Banking and Lending Ayco Marcus Enterprise Partnerships Global Investment Research Global Institute

We harness every resource, insight, relationship, and competitive advantage to drive superior results for our clients.

Exchanges The Markets Talks at GS Top of Mind Outlooks Markets Macroeconomics Artificial Intelligence Alternative and Private Markets IPOs and M&A Europe Videos Podcasts Articles Reports

Our award-winning podcast features Goldman Sachs leaders on the key issues shaping the global economy.

Our People and Leadership 157 Years of Excellence Community Impact Our Focus on Sustainability Our Vendor Program Partnerships Locations

We help entrepreneurs create jobs and economic opportunity through rigorous business education programs, access to capital, and networking.

Students Life at GS Benefits Featured Offices Open Roles

Goldman Sachs Research raised its S&P 500 forecast for year-end 2026 to 8000, up from 7600, projecting a 6% return (as of May 26). Our strategists raised their earnings per share forecasts to $340 for 2026 (representing 24% annual growth) and $385 for 2027 (13% growth). AI-infrastructure beneficiaries are expected to account for roughly half of the earnings growth this year. The valuation multiple for US stocks is expected to remain flat at roughly 21 times earnings as modest declines in Treasury yields are offset by slowing growth, geopolitical uncertainty, and investor skepticism about the durability of AI-related profits. While conditions mostly support a bull market for stocks, a sharp increase in momentum and narrow market breadth are emerging as cautionary signals.

First-quarter earnings were “exceptionally strong,” Snider writes in a report. Earnings increased 18% year over year, and the median company in the index is on track for its strongest quarterly growth rate in the past decade outside of the period following the US tax cuts in 2018 and the post-pandemic reopening. The investment boom in artificial intelligence infrastructure (AI) is a core factor behind the upgraded outlook. The consensus of analyst estimates is for the largest hyperscale tech companies to spend $754 billion on capital expenditures this year—an 83% increase from 2025—and $905 billion in 2027. “We believe there is upside risk to consensus capex estimates in 2027,” Snider writes. “Analysts have been too conservative during each of the past three years.” Snider expects the beneficiaries of that spending to account for roughly half of total S&P 500 earnings growth in 2026 and next year. Semiconductor companies are the primary direct beneficiaries, and a number of tech hardware, industrials, and utilities companies are also getting a large earnings boost from the AI buildout. However, the broader economy presents a more mixed picture for the stock market. Softening consumer spending, elevated input costs, and fading fiscal stimulus from recent tax legislation are expected to weigh on companies that are not benefitting from AI investment, according to Goldman Sachs Research. “Recent inflation readings and corporate commentary have signaled the risk to profit margins from input cost pressures,” Snider writes. Furthermore, the sustainability of the momentum in corporate earnings will depend on corporate America’s ability to translate AI investments into recurring profits, Snider notes. While enterprise adoption appears to be in its early stages, our strategists expect AI’s impact on productivity and earnings to become increasingly visible in coming years. The team’s forecasts embed a 0.4 percentage point boost to S&P 500 EPS growth from AI productivity this year and a 1.5 percentage point boost in 2027.

Our weekly newsletter delivers the latest insights on economic forces shaping markets—from Goldman Sachs leaders, economists, and investors around the world. By submitting this information, you agree that the information you are providing is subject to Goldman Sachs’ Privacy Policy and Terms of Use. You consent to receive our newsletter via email.