Goldman just made the latest case that earnings still matter more than the macro noise
Goldman Sachs has joined the growing camp of strategists willing to stay bullish on US equities, raising its year-end 2026 target for the S&P 500 to 8,000. That replaces its prior 7,600 forecast and implies another 6.4% upside from Tuesday’s close at 7,519.12. Goldman’s Ben Snider and team said the change reflects stronger earnings expectations after an exceptionally strong first-quarter reporting season.
That is the real message here. Wall Street is still willing to look through inflation pressure, war-related uncertainty, and higher yields as long as corporate profits keep surprising to the upside.
AI is still doing much of the heavy lifting
Goldman’s thesis is not complicated. Earnings are growing, and the biggest contributors are still the companies and suppliers tied to the AI buildout. The firm said beneficiaries of AI infrastructure spending should account for about half of S&P 500 EPS growth this year, which helps explain why the market keeps rewarding the same cluster of chipmakers, hyperscalers, and hardware-linked names.
That matters because it reinforces a market dynamic investors have been living with for months: this is still an earnings-led rally, but it is not being led evenly. A relatively narrow set of AI-linked companies continues to do an outsized amount of the work.
Goldman is getting more optimistic on profits, not blindly more optimistic on valuation
The firm also lifted its 2026 earnings-per-share forecast for the S&P 500 to $340, while projecting $385 for 2027, which would represent another 13% increase.
That is important because Goldman is not simply slapping a higher multiple on the market and calling it a day. The upgrade is being driven by profit expectations, not a fantasy that valuations can expand forever. In fact, Goldman explicitly warned that uncertainty around AI sentiment, macro conditions, and interest rates should keep a lid on any major multiple expansion.
In other words, the bullish case here is still rooted in operating performance.
That makes this a more serious call than it first appears
A higher target is one thing. A higher target based on stronger earnings estimates is more meaningful.
Plenty of investors remain uneasy with the backdrop. Oil has been volatile. Inflation has proven sticky. Treasury yields have climbed back into uncomfortable territory. Even so, the market has kept moving higher because earnings have remained strong enough to overpower those concerns. Goldman is effectively arguing that this pattern is not finished yet.
That is also why this call lines up with other recent strategist upgrades. According to Reuters, Morgan Stanley and Deutsche Bank are also now looking for roughly 17% returns in the S&P 500 this year.
The risk is obvious: the rally is still asking a lot from the same theme
None of this means the setup is clean.
Goldman itself noted that valuation upside should be tempered by the reality of slower future earnings growth and continued uncertainty around both AI and the macro outlook. That caution matters. Once a rally becomes this dependent on one theme, investors naturally become less forgiving if the numbers ever stop delivering.
For now, though, the market is not being asked to believe in a distant story. It is being shown strong current results.
WSA Take
Goldman’s new 8,000 target is another sign that the Street still believes the path of least resistance for equities is higher, provided earnings keep doing the work. This is not a call built on blind multiple expansion. It is a call built on the view that the AI capex boom is still translating into real profit growth across the index.
That does not remove the risk. It does make the bull case easier to defend. As long as earnings stay this strong, the market can keep looking expensive and still move higher.
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