Goldman Sachs Sees AI-Led S&P 500 Earnings Growth Peaking in 2026

Goldman Sachs warned that AI spending propping up S&P 500 earnings growth will wane after this year. The assessment was reported on Sept. 19 and positions 2026 as the high-water mark for the current capex contribution to index earnings. Business Insider

Chief U.S. equity strategist Ben Snider said the firm's base case is for S&P 500 earnings growth to decelerate, not collapse, in coming years. Yahoo Finance

Snider holds an 8000 year-end price target for the S&P 500. He is chief U.S. equity strategist at Goldman Sachs. MarketWatch

Goldman Sachs expects S&P 500 earnings per share to increase 12% in 2026 and 10% the following year. Goldman Sachs

Snider estimates that AI-related investment will drive approximately 40% of S&P 500 earnings-per-share growth in 2026. In the same outlook, Goldman Sachs forecast US stocks to rise 6% in 2026. Goldman Sachs

Goldman's research momentum signal stood in the 98th percentile and its market breadth signal stood in the 94th percentile, indicating extreme elevation. MarketWatch

The broader context here is the quality and concentration of earnings growth rather than the headline growth rate alone. When close to half of index EPS growth is linked to an investment cycle, that growth carries a different persistence profile than growth funded by broad end-demand, pricing power or sustained productivity gains. Capex creates first-order earnings for suppliers and second-order capacity that must then be monetized. The sequence works while spending accelerates. It compresses when spending merely levels off. That is why deceleration matters. Positive compounding can continue while incremental leverage fades.

In my view the tension for practitioners is between that earnings path and current positioning. An EPS trajectory of 12% followed by 10% already embeds a step down in momentum. If the AI-capex share normalizes, the residual growth engine must carry more weight to meet the same index target. Elevated momentum and breadth percentiles sharpen that sensitivity. Momentum captures persistence of price trends. Breadth captures participation. When both sit near extremes, revisions do not stay isolated. They propagate across factors and sectors that had been pulled along by the same theme. Crowding does not set the fundamental outcome, but it shapes the adjustment if estimates move.

Looking at what this means for risk management, the variable to watch is composition, not just level. The useful split is capex-linked earnings versus the rest of the index. That residual determines whether an 8000 target can be underwritten by multiple stability or requires further expansion into slower growth. Orderly deceleration allows time for revenue productivity to replace investment-led profit. A sharper pause forces the market to re-underwrite forward earnings without the pass-through that had flattered margins. For portfolio construction, that argues for close tracking of capex guidance, order books and the breadth of estimate revisions outside the direct AI supply chain.

For trading desks and allocators, the message is sequencing. Goldman is not describing an earnings collapse. It is describing peak contribution. Peaks are difficult because headline numbers can still look strong while leading inputs soften. That phase rewards attention to revision breadth, earnings call language on project returns, and the link between investment intensity and cash conversion. If those hold, deceleration remains consistent with a higher index level. If they loosen, the same 8000 objective implies a richer multiple on a lower-quality earnings base, with less room for disappointment.