Goldman Sachs: S&P 500 earnings growth of 26% is not a bubble

According to a Goldman Sachs report on September 17, 2026, the S&P 500 saw a 51% year-over-year earnings per share growth in the second quarter, with a 26% increase over the past four quarters. Goldman Sachs stated that while earnings are exceptional, they do not indicate a bubble. The baseline scenario suggests a growth slowdown rather than a collapse, with EPS growth projected at 11% for both 2027 and 2028, reaching $415 and $460 respectively, and a 12-month target of 8,700 points. AI capital expenditure contributed nearly half of this year's earnings growth, but this contribution is expected to decline from 11 percentage points in 2026 to 7 percentage points in 2027, turning negative in 2028. The bank noted that AI capital expenditure, semiconductor margin expansion, and equity investment gains are temporary drivers that will weaken next year. If semiconductor gross margins fall from 70% to the 15-year average of 55%, S&P 500 earnings could drop by approximately 10%.