{"id":9751,"date":"2026-06-29T18:24:48","date_gmt":"2026-06-29T18:24:48","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=9751"},"modified":"2026-06-29T18:24:48","modified_gmt":"2026-06-29T18:24:48","slug":"goldman-sachs-doubles-down-on-stock-market-outlook-for-2026","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=9751","title":{"rendered":"Goldman Sachs doubles down on stock market outlook for 2026"},"content":{"rendered":"<p><\/p>\n<p>Q2 earnings season begins in mid-July. Goldman Sachs chief U.S. equity strategist Ben Snider, in a note published June 28, called it &#8220;a critical test&#8221; for U.S. stocks. The word choice was deliberate. The market&#8217;s 2026 gains have come almost entirely from earnings growth rather than investors paying higher prices for the same profits. If earnings disappoint, the structure of the rally faces its most serious challenge of the year.<\/p>\n<p>Snider&#8217;s note also said the structure is still intact. Goldman is not backing off its constructive view, and the bank laid out exactly why it thinks Q2 results will reinforce rather than undermine the case for stocks.<\/p>\n<h2><strong>Why Goldman Sachs called Q2 earnings a critical test for the S&amp;P 500<\/strong><\/h2>\n<p>&#8220;Corporate profit growth drove essentially all of the S&amp;P 500&#8217;s gains over the past year,&#8221; Snider wrote in the June 28 note. Strong Q2 results would validate that structure and give the rally a reason to continue. Weak results or guidance cuts would expose how dependent the market has become on earnings delivery.<\/p>\n<p>Goldman raised its year-end S&amp;P 500 target to 8,000 from 7,600 on May 26, as TheStreet reported. <\/p>\n<p>The bank&#8217;s 2026 earnings-per-share forecast for the index stands at $340, representing 24% year-over-year growth. It projects $385 for 2027, a further 13% increase. FactSet estimates S&amp;P 500 Q2 earnings growth at 22%, up from 18.7% at the start of the quarter, with revenue growth expected at 12.1%, the strongest pace since Q2 2022.<\/p>\n<p>&#8220;Continued earnings growth should drive continued equity market upside,&#8221; Snider wrote.<\/p>\n<p><strong>More Goldman Sachs:<\/strong><\/p>\n<ul>\n<li><strong>Goldman Sachs Intuitive Surgical call goes against the grain<\/strong><\/li>\n<li><strong>Goldman Sachs revisits its gold price target after Fed decision<\/strong><\/li>\n<li><strong>Goldman Sachs has blunt message for AI stock investors<\/strong><\/li>\n<\/ul>\n<p>Goldman also noted the risk embedded in high expectations. Companies missing Q2 estimates are being punished more severely than historical norms, with misses sending stocks down an average of 4.2%, compared to a historical average of 2.9%. The market has little tolerance for disappointment at current valuations.<\/p>\n<h2><strong>How AI spending is anchoring Goldman&#8217;s bullish earnings case<\/strong><\/h2>\n<p>The core of Goldman&#8217;s argument sits in the AI capex cycle. AI infrastructure investment is expected to account for roughly half of all S&amp;P 500 earnings growth in 2026, Goldman Sachs Research confirmed. <\/p>\n<p>The largest hyperscale technology companies are projected to spend approximately $754 billion on capital expenditure this year, an 83% increase from 2025. Goldman expects that figure to reach $905 billion in 2027.<\/p>\n<p>&#8220;We believe there is upside risk to consensus capex estimates in 2027. Analysts have been too conservative during each of the past three years,&#8221; Snider wrote.<\/p>\n<p>Goldman&#8217;s basket of stocks tied to AI data center construction has returned nearly 60% year-to-date. Semiconductor companies are the primary direct beneficiaries. Tech hardware, industrials, and utilities are also absorbing meaningful earnings boosts from the AI buildout. As TheStreet reported, Goldman sees the spending split between AI and broader capex as a structural shift, not a one-year event.<\/p>\n<figure>\n<p>                        <img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.thestreet.com\/.image\/NDA6MDAwMDAwMDAzMDk1NDE3\/markets-take-a-plunge-amid-new-inflation-numbers-and-continuing-iran-war.jpg?profile=rss\" height=\"675\" width=\"1013\"><figcaption>Goldman&#8217;s basket of stocks tied to AI data center construction has returned nearly 60% year-to-date<\/p>\n<p>M&amp;period;Santiago&amp;sol;Getty Images<\/p>\n<\/figcaption><\/figure>\n<h2><strong>The risks Goldman attached to its bullish S&amp;P 500 forecast<\/strong><\/h2>\n<p>Goldman&#8217;s constructive stance comes with specific caveats. The S&amp;P 500 is trading at roughly 21 times forward earnings, a level that is higher than approximately 87% of observations over the past 40 years. Snider acknowledged the valuation but argued that near-record corporate profitability and relatively low interest rates justify the multiple.<\/p>\n<p>The concentration at the top of the index is a separate concern. The seven largest technology stocks, Nvidia, Apple, Alphabet, Microsoft, Amazon, Broadcom, and Meta, post a collective return on equity of 44%, up nine percentage points over the past three years. <\/p>\n<p>Goldman estimates their ROE will fall by an average of 700 basis points next year as depreciation at hyperscalers increases and asset intensity rises. That erosion hits the companies most responsible for the index&#8217;s recent outperformance.<\/p>\n<p>Goldman also flagged weak consumer spending and elevated costs as risks. As TheStreet reported, the bank identified a sustained rise in bond yields or a sharp pullback in AI capital spending as the two clearest signals that the rally&#8217;s foundation is cracking. Goldman&#8217;s base case is that neither of those scenarios plays out through year-end.<\/p>\n<h2><strong>What Goldman&#8217;s S&amp;P 500 stance means for investors heading into Q2<\/strong><\/h2>\n<p>Goldman&#8217;s preferred positioning reflects its read on where the next earnings cycle leads. Snider recommends secular growth companies and businesses tied to power infrastructure investment. He advises selectivity within the Magnificent 7 rather than broad exposure to the group. The bank is also looking at AI infrastructure plays beyond chips, including data governance, cybersecurity, and robotics.<\/p>\n<p>The S&amp;P 500 is currently trading near 7,365 after a technology-driven selloff. Goldman&#8217;s 8,000 target implies approximately 9% additional upside from here. The earnings data needed to support that move starts arriving in mid-July, when major banks begin reporting Q2 results.<\/p>\n<p>Ben Snider has been making the earnings-driven case for this market since January. Two consecutive quarters of strong results have backed the call. Q2 is the quarter that will show whether the pace of earnings growth can hold against a bar that has been raised every reporting season since 2024.<\/p>\n<p align=\"center\"><strong>Related: Morgan Stanley issues verdict for nervous stock market investors<\/strong><\/p>\n<p>#Goldman #Sachs #doubles #stock #market #outlook<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Q2 earnings season begins in mid-July. Goldman Sachs chief U.S. equity strategist Ben Snider, in a note published June 28, called it &#8220;a critical test&#8221; for U.S. stocks. The word&hellip; <\/p>\n","protected":false},"author":1,"featured_media":9752,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[2390,1360,33,601,1361,91],"class_list":["post-9751","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-doubles","tag-goldman","tag-market","tag-outlook","tag-sachs","tag-stock"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/9751","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9751"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/9751\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/9752"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}