Goldman Sachs Lifts S&P 500 Target As Earnings Growth Continues To Drive Wall Street Rally
Goldman Sachs has raised its year-end target for the S&P 500 as Wall Street continues to post record highs.
The investment bank increased its 2026 year-end target for the S&P 500 to 8,000 from 7,600, implying additional gains from Tuesday’s closing level of 7,519.12. The new forecast places Goldman among the most bullish firms tracked in CNBC’s latest market strategist survey.
Goldman strategist Ben Snider said the bank’s revised outlook reflects accelerating earnings growth across corporate America, particularly among companies tied to artificial intelligence infrastructure spending. Goldman also raised its earnings-per-share forecast for the S&P 500 to $340 for 2026, representing a projected 24% increase from the prior year.
“Earnings growth has powered the entire S&P 500 return so far this year,” Snider wrote in a note to clients cited by CNBC, adding that increases in earnings estimates have outpaced the benchmark’s stock-price gains.
The broader market has climbed despite mounting concerns tied to the conflict involving Iran, rising bond yields and ongoing uncertainty surrounding global economic growth. Technology and semiconductor stocks tied to AI infrastructure spending have continued leading gains across U.S. equities, helping offset investor concerns about geopolitical instability and inflation pressures.
Shares of companies including Advanced Micro Devices and Micron Technology have posted strong gains this year as investors continue pouring money into AI-related sectors.
Goldman said roughly half of the projected earnings growth this year is expected to come from AI infrastructure investment. The bank pointed to continued spending by hyperscalers and power infrastructure firms as major contributors to corporate profit expansion.
The upbeat forecast followed what analysts described as one of the strongest quarterly earnings seasons in recent years. According to data from FactSet, first-quarter S&P 500 earnings rose more than 28% from the same period a year earlier, marking the strongest growth rate since the fourth quarter of 2021.
FactSet data also showed that approximately 84% of S&P 500 companies exceeded analyst earnings expectations during the quarter, above the five-year average of 78%.
Snider said Goldman expects market valuations to remain relatively stable even as earnings continue growing. The bank cited moderating economic growth, investor caution surrounding the sustainability of AI-related earnings, and geopolitical risks as factors limiting further expansion in valuation multiples.
The firm also raised its 2027 earnings forecast for the S&P 500 to $385 per share, reflecting expectations for continued profit growth across large-cap U.S. companies.
Other market strategists have also pointed to earnings momentum as the key force supporting equities this year. Earlier this week, Yardeni Research President Ed Yardeni described the current market environment as being driven by “fabulous earnings momentum,” according to comments carried by MarketWatch.
Goldman additionally recommended investors focus on companies with strong earnings revisions, particularly firms involved in AI infrastructure development and power-related investment.
