Goldman Sachs raises S&P 500 year-end forecast to 8,000 on strong corporate earnings: Report
New York, May 27
,: Goldman Sachs projected a robust outlook for the S&P 500 as it raised the forecast for the index to 8,000 from 7,600 by year's end on the back of continued strength in corporate earnings, a Reuters report said.
Both the S&P 500 and the Nasdaq hit record highs on Tuesday after investors bought into the massive AI investments by tech giants. The robust AI demand is fuelling a continued rally even as mixed signals continue to emerge from the Middle East conflict.
"Earnings growth has powered the entire S&P 500 return so far this year, and we expect this dynamic to continue in the coming months," the Reuters report quoted from the Goldman Sachs note.
The brokerage has raised the earnings-per-share target to $340 for 2026 and to $385 for 2027, according to the note.
Brokerages have been bullish on the AI-driven rally on the Street and have given calls that reflected growing optimism around corporate earnings despite a shaky ceasefire in the Middle East and no certainty around a durable peace agreement. The continued closure of the critical Strait of Hormuz has made everyone cautious about the future of oil. Energy price pressures have started to weigh on the US consumers, who are holding back on spending, trying to gauge the unfolding situation.
The bullish sentiment comes at a moment when inflation fears are rising as oil gets buffeted by strong headwinds from an unstable Middle East.
The consumer sentiment in May tumbled to a record low as US households grapple with rising energy prices and the spectre of an interest rate hike by the US Federal Reserve. Kevin Warsh, the new Fed chair, took over last week on Friday and is expected to take a closer look at the evolving situation with his emphasis on reforms and US President Trump's focus on slashing rates. Trump said that Warsh will have the full support of his administration.
The brokerage sees the falling consumer spending and elevated costs as challenges but feels that the higher AI investments will offset these pressures.
Semiconductor stocks have seen a dizzying rally as the AI frenzy takes over Wall Street. American chip giant Micron Technologies surged 19% on Tuesday, entering the $1 trillion market valuation club.
— ANI
Reader Comments
Interesting times! The AI frenzy is real, and Micron hitting $1 trillion is mind-blowing. But with consumer sentiment at a record low and the new Fed chair taking over, I'm skeptical. India's IT sector might benefit from this tech boom, but higher energy costs could hurt our economy too. Hoping for balance!
Goldman's optimism is typical Wall Street cheerleading! Corporate earnings might be strong, but with Trump pushing for rate cuts and the Middle East mess, this feels like a bubble waiting to burst. For India, we need to watch our own ship—nimma desh mein bhi inflation badh raha hai! 😅
As an investor, I'm cautiously excited! AI-driven growth is undeniable, and these targets reflect real earnings momentum. However, the consumer spending slowdown is a red flag. We in India also feel the oil price squeeze—petrol prices making life tough. Let's hope the new Fed chair manages wisely!
I'm not buying this hype! 🚩 Goldman always raises targets when markets are frothy. Consumer sentiment hitting record lows says it all—Americans are struggling. For us Indians, rising fuel costs and a weaker rupee could dampen any global rally. Focus on ground realities, please!
From an Indian perspective, this US rally is a double-edged sword. Our IT stocks might get a boost, but if oil prices spike due to Hormuz closure, our import bill shoots up. The AI boom is exciting—maybe we should invest more in our own tech startups. Waise b
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