Goldman Warns AI-Driven Earnings Growth to Slow Down in 2027

Goldman Sachs has warned that the earnings growth of the S&P 500 index will slow down in 2027 due to the fading momentum of the artificial intelligence (AI) investment boom. According to Ben Snider, the bank's chief US equity strategist, the AI spending wave has accounted for nearly half of this year's S&P 500 earnings growth.

The AI investment boom has powered a significant portion of the index's profit expansion in 2026, but Goldman expects it to lose steam next year. Snider noted that capital spending will decelerate and depreciation on the massive infrastructure buildout will start to weigh on corporate income statements.

The semiconductor industry is particularly vulnerable, as the recent surge in profit margins is unlikely to hold. The strategist expects supply to remain tight through 2027 but for the rate of margin expansion to slow next year. In an adverse scenario where AI infrastructure investment slows, supply increases, or technological shifts lower semiconductor prices, the impact on the index could be substantial.