Goldman Sachs Research Expects Slower S&P 500 Earnings Growth in 2027 (Only 18%). Can the Bull Market Keep Going?
S&P 500 earnings growth might slow in 2027. That doesn't mean investors should stop buying stocks.
Goldman Sachs analysts have projected a slowdown in S&P 500 earnings growth for 2027, with growth expected to decrease from 29% in 2026 to 18% in 2027. Despite this, the investment firm remains optimistic about the bull market's continuation, albeit with reduced momentum and increased volatility. The tech-heavy Nasdaq-100 index has seen a decline of approximately 8% since reaching an all-time high on October 6, while the S&P 500 has dropped by about 2% over the same period.
The concern lies in the potential overinvestment by major tech companies in AI data centers and the development of expensive AI models, with limited evidence of profitable new AI products or significant economic productivity gains. However, the S&P 500 as a whole continues to demonstrate strong earnings growth across various sectors, including Energy, Information Technology, and Materials.
Investors should remain vigilant for potential risks, but also consider the long-term prospects of the market, which historically has delivered average annual returns of around 10%.
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