Goldman Sachs: AI Spending Will Fuel S&P 500 Growth Through 2028
Goldman Sachs has downplayed concerns of an earnings bubble in the US market, stating that AI spending is unlikely to decline before 2028.
The bank's Chief Economist Jan Hatzius noted that while corporate earnings are indeed in a state of 'earnings excess' relative to normal cycles, the growth rate is expected to slow down as private equity gains fade and AI spending approaches its peak.
According to Goldman Sachs, AI infrastructure will contribute approximately 15 percentage points to S&P 500 EPS growth in 2026, while hyperscale cloud service providers will add an additional 4-3-3 percentage points respectively in the same years.
Major investment banks including Morgan Stanley, JPMorgan, Barclays, and HSBC have raised their earnings forecasts for the S&P 500, with some expecting the index's profit growth to be sustained by AI capital-spending boom through 2027.