Catenaa, Friday, November 13, 2026- Goldman Sachs expects the S&P 500 to climb to 8,700 points over the next 12 months, despite a recent market sell-off.
The projected target implies an approximately 14.6% advance from the benchmark’s latest closing level of 7,592.40, Reuters reported.
Goldman Sachs maintained its bullish outlook despite a sharp correction in major US technology stocks, as investors reassessed the future of AI infrastructure spending following the Democratic Party’s victory in the US midterm elections.
Goldman’s portfolio strategy team projects S&P 500 earnings per share will grow 16% in 2027, down from an estimated 32% in 2026, according to Seeking Alpha.
It expects European earnings growth to slow to 8% from 24%, while Japan’s slows to 13% from 22%.
Goldman Sachs expects equities to rise in 2027 despite the slowdown in AI infrastructure spending, as more attractive valuations, economic expansion, and earnings growth would be positive for the market with lowering of inflation and yields.
Goldman puts US hyperscalers at about 19.7 times forward earnings, below consumer staples. Microsoft illustrates why that discount stands out.
Azure revenue grew 48% in its latest quarter, even as cash spending on property and equipment more than doubled to $39.4 billion from a year earlier.
Reuters reported that the recent market sell-off has brought the S&P 500’s forward price-to-earnings ratio to around 18.5 times, remaining attractive for the next 12 months, from 23 times in early 2026.
Goldman Sachs maintained an “overweight” rating for US and Japan equities while being “neutral” for Asia and emerging markets, and “underweight” for Europe.
“From here, we expect equities to generate positive returns, albeit with higher volatility than in recent years,” Goldman Sachs said.
Reuters reported that troubles at chip giant Nvidia after long-time CEO Jensen Huang quit following reports of alleged extramarital affairs have added to worries about the AI trade.
Citing data compiled by LSEG, Reuters reported Nvidia’s valuation has sharply declined, with shares trading at 11.7 times its projected earnings over the next 12 months, the lowest multiple since February 2012.
