Goldman Sachs Sees US Earnings Growth Decelerate but Not Collapse

Goldman Sachs has pushed back on concerns about an 'earnings bubble' in the US market, arguing that profit growth will slow down but not collapse.

The firm's chief US equity strategist, Ben Snider, believes that the current rapid pace of earnings growth is unsustainable and will gradually decelerate to a more typical double-digit pace.

Data shows that S&P 500 constituents have posted year-over-year profit growth of around 30% in each of the first two quarters this year, near historical highs.

Goldman Sachs expects the S&P 500 to grow by around 11% next year and for earnings growth to decelerate from 2027. The firm's target price for the index is around 8,700, representing a roughly 14% upside over the next 12 months.