STOCKS | Goldman Sachs Sees S&P 500 Earnings Growth Slowing, Not Crashing

Goldman Sachs strategists said S&P 500 earnings growth is likely to slow rather than collapse, despite recent “earnings beats” among index constituents. According to Sina Finance, the team led by Ben Snider forecast S&P 500 earnings per share growth of 11% in 2027 and 2028. The strategists said AI-related investment contributed nearly half of the S&P 500’s earnings growth this year. They added that as capital spending slows, AI’s effect on earnings is expected to shift from an 11 percentage-point boost in 2026 to a slight drag in 2028. The team said productivity gains from AI are expected to gradually replace investment as an earnings driver, contributing 1 percentage point to EPS growth in 2027 and 2 percentage points in 2028. Goldman also said unusually high semiconductor profit margins and temporary investment gains are two other reasons earnings are above trend. The strategists said if semiconductor gross margins fall back to 55%, their 15-year average, S&P 500 earnings would decline by about 10%. They kept their 3-month, 6-month, and 12-month S&P 500 targets unchanged at 8,000, 8,300, and 8,700, respectively.