Goldman Sachs analysts reject concerns regarding an earnings bubble in the S&P 500 index. The firm anticipates continued double-digit growth in corporate profits. Chief U.S. equity strategist Ben Snider noted that aggregate earnings for the index are currently rising by more than 30% year over year, with the median stock showing a 14% gain.
The bank projects that demand for compute and token consumption related to artificial intelligence will persist through 2027. Despite potential deceleration due to rising energy costs and fading fiscal tailwinds, Goldman Sachs expects robust results, supported by third-quarter GDP growth tracking above 3%.
Deutsche Bank maintains a bullish outlook, reaffirming its year-end target of 8,000 points for the S&P 500. The bank’s equity strategy team forecasts roughly 30% year-over-year growth for third-quarter earnings. Furthermore, Deutsche Bank increased its 2027 earnings-per-share projection to $420, representing nearly 17% growth.
Historical data cited by Deutsche Bank indicates that 21 out of the past 23 mid-term election years resulted in positive fourth-quarter returns, with an average increase of 7%. Both financial institutions conclude that while growth rates may moderate, the market remains supported by AI investments and economic resilience.
