Goldman Sachs forecasts strong US earnings season driven by AI spending boom
The bank raised its S&P 500 year-end target to 8,000 as AI infrastructure capex reshapes corporate profit expectations across sectors
Goldman Sachs just told Wall Street what Wall Street wanted to hear: earnings are going up, and AI is the engine. The bank’s strategists raised their S&P 500 year-end 2026 target to 8,000, up from a prior estimate of 7,600, implying roughly a 6% gain from late-May levels.
The driving force behind the revision is a projected 24% year-over-year earnings growth for S&P 500 companies, with expected earnings per share hitting $340 for 2026 and $385 for 2027. About half of that earnings expansion, according to Goldman’s research team led by strategist Ben Snider, traces directly back to AI infrastructure spending.
The AI capex machine keeps accelerating
Goldman’s forecast anticipates that major cloud providers could collectively pour $670 billion into capital expenditures in 2026. The revision upward happened because AI capex estimates kept climbing, as Goldman’s previous estimate had penciled in a more modest 12% overall EPS growth for the year.
Semiconductors and cloud infrastructure companies are expected to post the most substantial profit increases during the upcoming Q2 earnings season, which kicks off in late June. Energy companies round out the bullish picture, as data centers are voracious consumers of electricity. Goldman’s strategists flagged energy as a secondary but meaningful tailwind for the broader earnings outlook.
Risks investors should actually think about
A 24% earnings growth projection is aggressive. Goldman’s previous estimate was 12%, meaning they essentially doubled their expectations.
When half of S&P 500 earnings growth comes from a single technology theme, the index becomes a leveraged bet on that theme’s continued momentum. The upcoming Q2 earnings season, starting in late June, will be the first real test of whether these elevated expectations can be met.
Traders should watch semiconductor earnings in particular. Companies like Nvidia have become the bellwether not just for AI stocks but for broader market sentiment. A beat from Nvidia tends to lift everything from cloud stocks to AI tokens. A miss could send shockwaves through both traditional and digital asset markets simultaneously.