AI Firm Anthropic Plans to Double Computing Power to 10 GW Next Year; Goldman Sachs Sees S&P 500 Rising 14%

Chip Stocks Surge as AI Investment Chain Gains Momentum

US stocks received renewed backing from institutional investors as the AI investment chain prepares for another major development. Reports indicate that Anthropic, the trillion-dollar-scale AI company, plans to have approximately 5 gigawatts (GW) of available computing power by the end of this year, with expectations to double that capacity by the end of next year.

Chip Stocks Rally into Friday's Close

The Philadelphia Semiconductor Index (SOX) surged 2.78% toward Friday's close. Memory chip concept stocks (Code: 886042) collectively strengthened:

• SanDisk (SNDK) jumped 10.99%, pushing its total market capitalization to $262.4 billion (approximately RMB 1.76 trillion)
• Seagate Technology (STX) rose nearly 7%
• Micron Technology (MU) gained nearly 4%
• Nvidia (NVDA) rose over 1%
• SK Hynix (SKHY) climbed more than 2%
• ARM increased over 4%
• Broadcom (AVGO) rose nearly 3%

Goldman Sachs Forecasts S&P 500 Rally

Strategists at Goldman Sachs (GS) stated that the S&P 500 (SPX) index will rise 14% to 8,700 points next year, driven primarily by earnings growth rather than valuation expansion.

Goldman Sachs Strategists Downplay "Earnings Bubble" Concerns

Goldman Sachs strategists have pushed back against concerns about a US corporate "earnings bubble," arguing that strong earnings growth is underpinned by a robust economic outlook and the artificial intelligence (AI, Code: 885728) boom.

Key Earnings Data

Data compiled by Bloomberg Intelligence shows:

• S&P 500 companies saw profit growth of approximately 30% in both the first two quarters of this year
• This marks one of the best performances on record
• Full-year earnings expectations have reached their highest levels since the post-pandemic economic rebound in 2021

Outlook from Goldman Sachs

While the growth rate indicates companies are "over-earning" amid a surge in AI investment, the team led by Ben Snider stated they expect profit growth to slow in the coming years rather than collapse completely.

Snider wrote in a report that market pricing reflects expectations for continued earnings growth while harboring reasonable skepticism regarding the sustainability of current profitability.

Market Context

Since hitting historic highs in August, US equities have struggled mainly due to inflation concerns. Despite analysts raising earnings forecasts, valuations of the S&P 500 have declined. Bloomberg Intelligence data shows market consensus continues to forecast healthy profit growth rates of 19% and 17% for 2027 and 2028, respectively.

Goldman Sachs' forecast of 11% growth for next year appears somewhat conservative. The strategy team noted that while capital expenditures continue to rise, they expect AI investment growth momentum to begin waning in 2027. Snider noted that margin expansion for semiconductor-related companies (Code: 881121) may also slow next year.

Snider predicts the S&P 500 will rise 14% to approximately 8,700 points next year, driven primarily by earnings growth rather than valuation expansion. He was among the most bullish on the market at the beginning of the year, accurately predicting that strong earnings growth and AI adoption would offset the impacts of rising oil prices and interest rate hikes.

Bank of America Issues Caution

Meanwhile, Bank of America (BAC) strategists, including Jared Woodard and Michael Hartnett, warned that investor positioning remains overly bullish given the prospect of slowing profit growth. Citing data from EPFR Global, Bank of America noted that US equity funds attracted nearly $64 billion in inflows this week, reaching a three-month high.

Major AI Infrastructure Developments

According to multiple media reports:

• Anthropic had approximately 1.5 GW of available computing power last year, compared to OpenAI's roughly 2 GW
• The AI lab has told investors it plans to have approximately 5 GW of available computing power by the end of this year
• The company expects its computing scale to double again from that base by the end of next year

Sources familiar with OpenAI's estimated figures said this aligns broadly with OpenAI's planning: reaching approximately 5 GW this year and around 10 GW next year.

Anthropic is actively finalizing multiple partnerships:

• The company has agreed to lease computing power from SpaceX (SPCX) at a cost of $1.25 billion per month, with the agreement running until May 2029
• The AI lab is currently in talks to lease computing power from Meta (META), a potential deal valued at up to $10 billion over two years

US Manufacturing Data and Market Outlook

Manufacturing Output Declines

Latest data shows US manufacturing output unexpectedly declined in August as manufacturers faced rising input costs and cooling production of business equipment. Data released by the Federal Reserve on Friday showed manufacturing output fell 0.3% month-over-month in August, against economists' median forecast of a 0.3% increase.

Key Events to Watch Next Week

US stock market investors will focus on:

• Interest rate trends
• Tensions in the Middle East
• New calls to slow down the development of artificial intelligence (Code: 885728)
• Whether stock indices can reach new highs

The market will continue to digest the Federal Reserve's decision announced this Wednesday to raise interest rates by 25 basis points.

Multiple Federal Reserve policymakers are expected to speak next week. Given that Fed Chair Kevin Warsh has explicitly stated his reluctance to provide forward guidance on the interest rate path, any clues regarding the plans for this hiking cycle (Code: 883436) are particularly valuable.

Impact of Rising Yields and Oil Prices

In recent weeks, US stock movements have been influenced by rising US Treasury yields and surging oil prices amid escalating conflicts in the Middle East.

Strategists at ING Group (ING) recently forecast that the Federal Reserve and the European Central Bank will each raise interest rates by 25 basis points in December, aiming to prevent energy price increases (Code: 850101) from transmitting into broader inflation.

A strategist team led by Carsten Brzeski wrote in a research note on Friday: "Both central banks are facing a supply-side shock triggered by soaring energy prices, the knock-on effects of which on the overall economy remain limited so far."

The European Central Bank will implement a "defensive hike," raising rates to 2.75%; the Federal Reserve will raise rates to 4.25%, focusing more on bringing inflation back to its 2% target.