Goldman Sachs Sees 17% S&P Upside and AI-Driven Europe Equity Opportunity
GS•Goldman Sachs raised its year-end S&P 500 target to 8,000 for a projected 17% upside and boosted its 2026 S&P EPS forecast to $340 (24% growth). Strategists also highlighted AI-driven opportunities in European equities backed by robust earnings and lack of downgrades, while noting geopolitical risks.
1. S&P Target Revision
Goldman Sachs raised its year-end S&P 500 target to 8,000 from 7,600, implying 17% upside for the index as AI-driven earnings momentum continues. The firm lifted its 2026 EPS forecast for S&P 500 companies to $340, signaling 24% year-on-year growth, and projects a further 13% rise in 2027.
2. European AI Equity Opportunity
Strategist Sharon Bell identified Europe as offering broader AI exposure beyond the US, with sectors such as infrastructure, energy and software tools supporting robust earnings. European equities have avoided aggregate earnings downgrades, suggesting that the region can capture AI-driven gains without reliance on a handful of pure tech giants.
3. European Macro Risk Factors
Bell warned that ongoing Middle East tensions and elevated energy prices pose pressure on European markets, potentially fueling inflation and weighing on consumers. Rising bond yields could challenge real estate and homebuilders, while the UK faces political uncertainty and fiscal strains, though FTSE 100 global earnings and rock-bottom domestic valuations offer selective entry points.
