Goldman Sachs has raised its year-end 2026 forecast for the Standard & Poor's 500 index to 8,000 from 7,600, citing expectations that expanded artificial intelligence (AI) investment will drive earnings growth, particularly among semiconductor companies.
According to Reuters on Wednesday, Goldman Sachs presented the 8,000 target for the S&P 500 in 2026 in a report released the same day. The figure is approximately 6.4% above the index's closing level of 7,519.12 on the day.
Goldman Sachs lifted its forecast on the back of solid corporate earnings growth. "S&P 500 returns so far this year have been driven by corporate earnings growth overall," Goldman Sachs said. "We expect this trend to continue over the coming months."
The investment bank also raised its earnings per share (EPS) forecasts for the S&P 500. It projected 2026 EPS at $340, up 24% from the previous year, and estimated that 2027 EPS would rise an additional 13% to $385.
Goldman Sachs particularly forecast that companies benefiting from AI infrastructure would account for about half of the total S&P 500 earnings increase this year. While slowing consumption and rising costs could act as risk factors, large-scale AI investment expansion is expected to offset these concerns, the bank said.
"S&P 500 earnings forecasts are rising faster than the pace of the index's gains," Goldman Sachs said. "In particular, semiconductor stocks at the core of AI infrastructure have seen even steeper increases in forward earnings estimates recently."
Goldman Sachs' announcement adds weight to bull market optimism that has been spreading across Wall Street. UBS Global Wealth Management (UBS GWM) raised its year-end S&P 500 forecast to 7,900 from 7,500 on Nov. 22. UBS assessed that rising AI-related earnings could defend against supply chain risks stemming from the Iran war and inflationary pressures.
