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Goldman strategists downplay 'profit bubble' fears, see S&P 500 at 8,700 in a year
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According to a Cailian Press report on September 18, strategists at Goldman Sachs led by Ben Snider have downplayed concerns about a U.S. corporate 'earnings bubble,' arguing that strong profit growth is supported by a robust economic outlook and the artificial intelligence boom. Data shows S&P 500 company profits grew by approximately 30% in both the first and second quarters of this year, marking one of the strongest performances on record. While acknowledging that this growth rate may be above sustainable levels amid surging AI investment, the Goldman team expects profit growth to gradually slow rather than collapse. Snider forecasts the S&P 500 will rise 14% to about 8,700 points over the next year, driven primarily by earnings growth rather than valuation expansion. He was among the more optimistic strategists at the start of the year, accurately predicting that strong earnings and AI adoption would sustain the bull market despite rising oil prices and interest rate hikes.
Source report
September 18 — Cailian Press — Strategists at Goldman Sachs have pushed back against growing concerns over a potential "earnings bubble" in U.S. corporate profits, arguing that the recent surge in earnings is underpinned by a robust economic outlook and the artificial intelligence boom.
According to data cited by the bank, companies in the S&P 500 index posted earnings growth of approximately 30% in both the first and second quarters of this year — among the strongest performances on record. The full-year earnings growth forecast is the highest since the post-pandemic economic rebound in 2021.
While the pace of growth suggests that corporate earnings may currently be above sustainable levels, particularly amid surging AI investment, the Goldman Sachs strategy team led by Ben Snider expects profit growth to moderate gradually over the next few years rather than collapse outright.
"Current market pricing already reflects expectations for sustained earnings growth, but investors remain cautious about the sustainability of current profitability," Snider wrote in a report.
Snider forecasts that the S&P 500 will rise by 14% to approximately 8,700 points over the next year, driven primarily by earnings growth rather than valuation expansion. At the start of this year, he was among the more optimistic strategists on U.S. equities, accurately predicting that strong earnings and AI adoption would offset the impact of rising oil prices and interest rate hikes, thereby sustaining the bull market.
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财联社Neutral / independent
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Goldman Sachs and Deutsche Bank reject US earnings bubble fears, see S&P 500 reaching 8,700