Goldman Sachs Raises S&P 500 Year-End Target to 8,000

CNBC reported Wednesday that Goldman Sachs has lifted its S&P 500 earnings growth outlook sharply. The bank now expects the benchmark index to finish 2026 at 8,000. That is up from a prior target of 7,600 and implies a further 6.4% advance from Tuesday’s closing level.

Earnings Are Doing All the Heavy Lifting

Goldman strategist Ben Snider anchored the revision in one core argument. He raised his 2026 earnings-per-share forecast for the S&P 500 to $340, representing a 24% profit increase for the year. Snider noted that S&P 500 earnings growth has accounted for the entire return the index has generated so far in 2026. Price-to-earnings multiples have actually contracted over that period. Profit expansion has been so robust that valuations look cheaper even as prices have risen.

FactSet data shows that first-quarter S&P 500 earnings climbed more than 28% year-over-year. That marks the fastest pace of profit growth since late 2021. Approximately 84% of S&P 500 companies beat analyst estimates in the quarter. The five-year average beat rate stands at 78%.

AI Infrastructure Spending Drives Half the Gain

Snider attributed roughly half of this year’s outsized earnings gains to spending on AI infrastructure. He specifically flagged hyperscalers and power infrastructure companies as standout opportunities within that theme. Goldman’s new 8,000 base case could be exceeded if geopolitical tensions ease and investor sentiment improves.

The S&P 500 has already climbed roughly 9.8% year to date. AI-linked hardware names have been among the primary drivers of that advance.

Background: A Market Multiple That Has Been Quietly Compressing

Over the past two years, the S&P 500 has risen approximately 40%. Snider’s analysis shows that near-term earnings growth arithmetically explains the full magnitude of that move. The valuation multiple has not expanded to drive returns. Going forward, Goldman expects the multiple to stay roughly flat. Modest relief from Treasury yields is likely to be offset by slowing economic momentum and uncertainty over geopolitical risks.

Snider also extended his earnings outlook into next year. His 2027 EPS estimate of $385 would represent a further 13% profit increase. The view aligns with independent commentary from Ed Yardeni of Yardeni Research, who this week described current conditions as driven by what he calls “fabulous earnings momentum.”

Goldman’s Trade Recommendation

Snider told clients to concentrate holdings in stocks with the strongest upward earnings revisions. He sees AI infrastructure beneficiaries as the clearest expression of that strategy heading into the second half of 2026.

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