Goldman Sachs and Deutsche Bank Bullish: S&P 500 Could Reach 8,000 by Year-End

Source: Cailianshe Editor: Liu Rui Date: September 23 (U.S. Eastern Time, Tuesday)

Goldman Sachs has strongly pushed back against market concerns over a potential earnings bubble in U.S. stocks. The bank forecasts that corporate earnings will continue to post double-digit growth starting from the new fiscal quarter next week.

Meanwhile, Deutsche Bank has echoed a similarly bullish outlook on U.S. equities, reaffirming its year-end S&P 500 target of 8,000 points.

Goldman Sachs Rejects the "Earnings Bubble" Narrative

Ben Snider, Goldman Sachs' Chief U.S. Equity Strategist, dismissed the so-called "earnings bubble" theory in a recent report, arguing that market fears over an earnings bubble in U.S. stocks are overblown and that current conditions do not meet the criteria for such a scenario.

An "earnings bubble" refers to a market situation where corporate profit growth becomes unsustainable. Once inflated earnings expectations revert to reality, such an imbalance typically triggers a significant market correction.

Snider stated that an earnings bubble would imply an imminent collapse in U.S. corporate profits—something Goldman Sachs believes will not happen.

Currently, the overall year-over-year earnings growth for S&P 500 constituents exceeds 30%, while the median earnings growth for individual stocks stands at a solid 14%.

Snider acknowledged that as the fiscal boost from the Trump administration fades and energy costs rise, the pace of U.S. corporate earnings growth is likely to slow. However, he still expects earnings performance to remain strong.

Tracking data shows that U.S. GDP growth for the third quarter is expected to exceed 3%.

Regarding the artificial intelligence sector, Snider noted that token consumption and computing power demand will continue to rise through 2027, making this one of the most important earnings drivers supporting the market.

He also pointed out that current investor positioning is at its lowest level since March this year, indicating widespread caution. If catalysts such as lower oil prices and falling interest rates materialize, this cautious stance could actually drive the market higher.

Why Is Deutsche Bank Also Bullish?

A stock strategy team led by Deutsche Bank analyst Binky Chadha recently published a research report titled "Racing to 8,000—or Even Higher?", outlining several factors supporting an optimistic view of U.S. stocks.

Deutsche Bank expects third-quarter U.S. corporate earnings to grow approximately 30% year-over-year, matching the strong performance seen in the second quarter. The bank has also raised its 2027 earnings per share (EPS) forecast to $420, implying nearly 17% earnings growth.

Historical patterns also provide support. Chadha's team noted that in 21 of the past 23 midterm election years, U.S. stocks posted gains in the fourth quarter, with an average increase of 7%. The bank added that current investor positioning, technical indicators, and market supply-demand dynamics all remain favorable.

Conclusion: Strong Growth, No Collapse

Both institutions reached a similar conclusion: U.S. corporate earnings have performed strongly throughout the year, and while they may moderate slightly in the fourth quarter, a crash-style decline is not expected.

As long as U.S. companies continue to achieve double-digit profit growth—driven by AI-related investments and the overall resilience of the U.S. economy—the S&P 500 is well-positioned to sustain its upward trajectory through the end of this year and into next.

(Cailianshe, Liu Rui)