US equities are set to reach fresh record highs next year, supported by stronger corporate earnings, broadening artificial intelligence adoption, and resilient economic growth, according to Goldman Sachs strategists.
The outlook adds to a growing consensus among major financial institutions that the ongoing market rally still has room to run.
AI-driven productivity expected to boost corporate earnings
Analysts at Goldman Sachs, led by Ben Snider, forecast earnings per share for S&P 500 companies to rise 12% in 2026, followed by another 10% increase in 2027.
A portion of that expansion will come from productivity improvements tied directly to AI.
The strategists estimate that artificial intelligence will contribute roughly 0.4% to earnings growth in 2026 and 1.5% the following year.
Snider noted that enterprise adoption of AI remains at an early stage, with larger companies currently making more visible progress than smaller firms.
Alongside AI-related gains, he cited “healthy nominal top-line growth, a fading drag from tariffs, and continued earnings strength for the largest stocks in the index” as key factors that will support profitability.
Snider, who will take over as Goldman’s chief US equity strategist at year-end, reaffirmed his target for the S&P 500 to reach 7,600 points in 2026.
That implies an increase of about 10% from current levels and suggests Wall Street’s largest benchmark may extend its run of record highs.
Broader market optimism builds across Wall Street
Goldman Sachs is not alone in its upbeat expectations.
Strategists at Morgan Stanley, Deutsche Bank, and RBC Capital Markets have all projected double-digit gains for US equities next year, citing a combination of economic resilience, earnings expansion, and persistent investor appetite for risk assets.
Market participants appear to share that outlook.
An informal Bloomberg survey found that global money managers expect the stock rally to continue, supported by improving confidence in the economic environment.
The S&P 500 recently closed at a record high, underscoring the strength of the current market momentum.
However, the optimism is not without caution.
Some asset managers warn that the massive capital being deployed into AI infrastructure and capabilities could be inflating valuations in tech-heavy segments of the market.
Concerns about a potential bubble have grown as mega-cap technology companies continue to outpace the broader index.
Mega-cap tech expected to drive profit growth again
Goldman’s Snider said the largest companies in the S&P 500 — including Nvidia, Apple, Microsoft, Alphabet, Amazon, Broadcom, and Meta — will remain critical engines of overall earnings growth next year.
He expects these firms to contribute roughly 46% of the index’s total profit expansion in 2026, only slightly below their outsized influence this year.
Analysts tracked by Bloomberg Intelligence forecast that net income for S&P 500 companies will rise 14% in 2026, fueled by an anticipated 18% profit increase among the so-called Magnificent Seven.
Their continued dominance reinforces the extent to which US equity performance remains concentrated among a handful of technology giants that are aggressively deploying AI to extend competitive advantages.
As Wall Street heads into 2026, the path of US stocks appears increasingly tied to the pace of AI adoption, the durability of mega-cap earnings, and investors’ confidence in the economic backdrop.
For now, Goldman Sachs and other major forecasters see those forces aligning in favor of another strong year for equities.
The post Goldman Sachs sees S&P 500 to jump 10% in 2026 powered by AI appeared first on Invezz
