Goldman Sachs Sees S&P 500 Reaching 8,700 as Earnings and Valuations Shape 2027 Outlook

NEW YORK, United States, November 14, 2026, ZEX PR WIRE, Goldman Sachs expects the S&P 500 to rise to 8,700 over the next 12 months, projecting further gains for US equities despite an expected slowdown in corporate earnings growth. The forecast reflects the bank’s view that improving valuations, continued economic expansion and potentially lower bond yields could support the market.

The projection represents an increase of more than 14% from the index’s latest reported close of 7,592.40 at the time of the bank’s forecast. Goldman Sachs also expects global earnings growth to slow significantly in 2027, indicating that the anticipated market advance may depend on factors beyond profit expansion alone.

The S&P 500 was trading at approximately 18.5 times forward earnings, down from recent levels above 23 times, according to the Reuters report. This decline in the valuation multiple suggests that the market has become less expensive relative to expected corporate profits following the recent technology-led correction.

Valuation changes can influence equity performance independently of earnings growth. If investors become more willing to pay higher multiples for company profits, stock prices may rise even when the pace of earnings expansion moderates.

However, valuation recovery is not guaranteed. Higher interest rates, weaker corporate guidance or renewed concerns about AI investment could limit investors’ willingness to pay premium prices.

Earnings Growth Expected to Slow

Goldman Sachs expects global earnings growth to at least halve in 2027. US earnings growth is projected to slow from approximately 36% to 11%, partly because spending by major cloud and technology companies on data centre infrastructure is expected to ease.

This forecast highlights a potential transition in the market’s growth drivers. The previous period of strong earnings expectations was supported by substantial investment in AI infrastructure, including processors, networking equipment and data centres.

If investment growth slows, some companies supplying this infrastructure may face a more challenging comparison against earlier periods of rapid expansion.

Technology Spending Remains a Key Risk

The outlook comes amid renewed concerns about the sustainability of AI-related capital expenditure. Investors are increasingly examining whether the revenue generated by AI products and services can justify the substantial investments being made by major technology companies.

The uncertainty surrounding Nvidia has added another layer to this debate. The company’s leadership transition has drawn attention to the wider semiconductor ecosystem and the importance of management continuity at businesses central to AI infrastructure.

Regional Preferences Reflect Different Growth Drivers

Goldman Sachs maintained an overweight view on US and Japanese equities, while assigning neutral positions to Asia and emerging markets and an underweight view to Europe, according to the report.

The bank’s assessment reflects its expectations for different regional markets, although such views remain forecasts rather than guaranteed outcomes.

For investors, the broader message is that the next phase of equity performance may depend on valuation levels, earnings quality and the ability of companies to convert technology investment into sustainable profits.