Goldman Sachs has revised its year-end 2026 target for the S&P 500 index to 8,000, up from a previous estimate of 7,600. The bank projects overall earnings per share growth of 24% for the year.
The primary driver is artificial intelligence. Approximately half of the forecasted earnings expansion is attributed directly to AI-related capital expenditure. The strategists, led by Ben Snider, anticipate major cloud providers could collectively invest $670 billion in capital expenditures by 2026.
This upward revision from an earlier 12% growth estimate makes the upcoming second-quarter earnings season a critical test. Semiconductor and cloud infrastructure companies are expected to report the strongest profit increases when reporting begins in late June.
Energy companies are also positioned as a beneficiary, due to the high electricity demands of data centers. However, the concentration of growth within a single technological theme presents a notable risk for investors.