Goldman's Snider Says US Earnings Boom Is Not a Bubble, Backed by AI and Economy

Bloomberg · Bloomberg Intelligence By Julien Ponthus Fri, September 18, 2026 at 3:14 AM PDT | 2 min read

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(Bloomberg) — Corporate America's blowout earnings are being underpinned by a robust economic outlook and the artificial intelligence boom, meaning worries about an "earnings bubble" are overblown, according to Goldman Sachs Group Inc. strategists.

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Profits at S&P 500 firms jumped around 30% in each of the first two quarters, among the best showings on record, data compiled by Bloomberg Intelligence show. Full-year expectations are the strongest since the post-Covid rebound in 2021.

While that pace suggests companies are "over-earning" as AI investments surge, the Goldman team led by Ben Snider said they expect profit growth to slow in the coming years rather than outright collapse.

"Market pricing embeds an outlook for continued earnings growth but healthy skepticism regarding the sustainability of current profitability," Snider wrote in a note.

US stocks have struggled since hitting a record in August largely on inflation concerns, and S&P 500 valuations have declined even as analysts have raised earnings estimates. Consensus continues to signal a healthy pace of profit growth at 19% and 17% in 2027 and 2028, respectively, BI data show.

Goldman's forecast for an 11% increase next year is slightly more cautious. The strategy team said they expect the boost from AI investments to start fading in 2027 even as capital spending continues to rise. The pace of profit-margin expansion at semiconductor-related firms is also likely to slow next year, Snider said.

He expects the S&P 500 to rally 14% to about 8,700 points in the coming year, driven by earnings growth rather than expanding valuations. Snider was among the more bullish voices coming into the year. He correctly predicted that strong earnings and AI adoption would offset the impact from higher oil prices and rate hikes, keeping the bull market intact.

Meanwhile, Bank of America Corp. strategists including Jared Woodard and Michael Hartnett warned investor positioning is still too bullish given the outlook for slower profit growth. US stock funds attracted nearly $64 billion in weekly flows, the biggest in three months, according to a BofA note citing EPFR Global.

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— With assistance from Sagarika Jaisinghani and Michael Msika.

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