Goldman Forecasts Double-digit S&P 500 Earnings Growth in 2026
GlendonSolid U.S. growth and a weaker U.S. dollar, as well as artificial intelligence productivity gains, are anticipated to support an increase in S&P 500 earnings next year, according t...
Solid U.S. growth and a weaker U.S. dollar, as well as artificial intelligence productivity gains, are anticipated to support an increase in S&P 500 earnings next year, according to analysts at Goldman Sachs.
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In a note, the strategists including Ben Snider and Ryan Hammond predicted that profit per share in stocks in the benchmark index would rise by an annualized 12% in 2026 to $305.
Revenue is also tipped to grow by 7% next, with 70 basis points of profit margin expansion, the analysts added.
For 2027, meanwhile, S&P 500 income per share is tipped to rise a further 10% to $336.
Underpinning these forecasts are Goldman Sachs's predictions for accelerating gross domestic product growth in the U.S., along with a further softening in the dollar. The dollar index, which tracks the greenback against a basket of currency pairs, has slipped by more than 7% over the past one-year period.
"Beyond the macro drivers, the profitability of the largest stocks will continue to be a key driver of S&P 500 earnings growth," they argued, adding that returns from the seven largest stocks in the index -- Nvidia, Apple, Microsoft, Google, Amazon, Broadcom, and Meta -- account for roughly a quarter of its total earnings.
The Goldman Sachs analysts projected that these stocks will raise their collective earnings by 29% in 2026, similar to a pace set in 2025. These shares have been buoyed by hopes that massive investments in AI will eventually pay off for investors, although some concerns have recently swirled around when these profits will be seen.
Worries have also surrounded whether the -- often debt-powered -- AI expenditures will squeeze profit margins, potentially denting the case for frothy tech valuations. A string of circular dealmaking in the AI sector has also raised eyebrows among some observers.
Still, "continued strength in AI investment alongside healthy growth in other businesses will support roughly +20% sales growth for these stocks in 2026," the Goldman analysts said.
Broader, AI-driven productivity gains are also expected to lift S&P 500 earnings per share by 0.4% in 2026 and 1.5% in 2027, with the analysts suggesting that the process of widespread AI adoption remains in its infancy.
"We [...] assume both corporate adoption and the realized share of the total potential productivity boost will gradually build over time," they wrote.
