EPS expected to increase by 12% due to improved AI productivity… Big tech, including NVIDIA and Apple, drives half of growth
Goldman Sachs “S&P 500 goes to 7,600 next year…AI will lead performance rally”
View enlarged image
Investment bank Goldman Sachs predicted that the U.S. stock market’s strength will continue next year.
According to CNBC on the 12th (local time), Ben Snyder, head of U.S. stock strategy at Goldman Sachs, presented the Standard & Poor’s (S&P) 500 Index target for 2026 as 7,600 points. This is more than 10% higher than the previous day’s closing price.
Snyder analyzed that artificial intelligence (AI) will drive the performance of S&P 500 companies by increasing productivity next year.
“The AI adoption process is still in its early stages, but large companies are making faster progress than small and medium-sized companies,” Snyder said, predicting that earnings per share (EPS) for S&P 500 companies will increase by 12% in 2026, reaching $305.
He explained that most of this EPS growth will come from the so-called ‘big tech six’: NVIDIA, Apple, Microsoft (MS), Alphabet, Broadcom, and Meta Platforms. He analyzed that these six companies will account for about 46% of the total EPS increase in the S&P 500.
The AI boom has driven the S&P 500 index to record highs throughout the year. The index closed at 6901 points in the previous day’s trading, hitting an all-time high based on the closing price.
Snyder also predicted that companies outside of Big Tech would also benefit. He added, “In 2026, there will be macro tailwinds such as accelerated economic growth and easing of tariff burden,” adding, “Through this, the profit growth rate of the remaining 493 stocks other than Big Tech will expand from 7% this year to 9% in 2026.”
On Wall Street, optimism continues not only from Goldman Sachs but also major institutions.
Fundstrat’s Tom Lee suggested next year’s S&P 500 index forecast at 7,700, and John Stoltzfuss of global financial services company Oppenheimer predicted that the index would rise to 8,100 next year.
However, it was also pointed out that uncertainty surrounding the Federal Reserve’s (Fed) future policy actions could be a burden on the index’s rise. The Federal Reserve cut its benchmark interest rate this week, but signaled that it would slow down further easing in the future.
Snyder also selected corporate profit margin as a key variable to pay attention to in 2026. He explained, “Whether the abnormally high profit margins of large U.S. stocks are sustainable has been a topic of debate among investors for a long time,” and added, “As AI competition among large technology companies has recently emerged, this issue will remain a key issue in 2026.”
Reporter Soo-jeong Lee soojunglee@g-enews.com
