Goldman Warns AI-Driven S&P 500 Earnings Momentum Set to Fade From 2027

Goldman Sachs (GS) warned that the AI investment boom, which drove nearly half of S&P 500 earnings growth this year, will begin losing steam from 2027 as capital expenditure growth slows and depreciation from large-scale infrastructure spending starts eroding margins. The bank's chief US equity strategist, Ben Snider, said that even with continued capex expansion, the earnings dividend will diminish. Under Goldman's base case, S&P 500 EPS is projected to grow 11% in both 2027 and 2028, reaching $415 and $460 respectively — a marked slowdown from 51% growth in the second quarter of 2026 and a 26% average over the past four quarters. Semiconductors pose the biggest risk, Goldman said. Chipmakers have enjoyed elevated margins on surging demand and constrained supply, but that dynamic is unlikely to persist. In a bear scenario involving cooling AI infrastructure spending, rising chip supply or technology-driven price declines, Goldman estimates S&P 500 earnings could shrink about 10%.