Goldman Sachs Group strategists said that behind the sharp increase in US corporate profits, there are strong economic prospects and support from the artificial intelligence boom, and market concerns about a “profit bubble” have been exaggerated. According to data compiled by Bloomberg Industry Research, profits of S&P 500 companies increased by about 30% in the first two quarters of this year, which is one of the strongest performances on record. Earnings growth expectations for the full year are the highest since the post-pandemic economic rebound in 2021. Goldman Sachs's forecast for next year is slightly cautious, and earnings are expected to increase 11%. The strategy team believes that although capital expenditure will continue to rise, the impact of AI investment on profitability will weaken starting in 2027. Snider also anticipates that semiconductor-related companies' profit margin expansion will slow down next year as well. Snider predicts that the S&P 500 index will rise 14% to about 8,700 points in the next year, and the main driving force will be profit growth rather than valuation expansion. At the beginning of this year, he was one of the more optimistic strategists for US stocks, and accurately predicted that strong profits and AI applications would offset the impact of rising oil prices and interest rate hikes, so that the bull market could continue.

Goldman Sachs Group strategists said that behind the sharp increase in US corporate profits, there are strong economic prospects and support from the artificial intelligence boom, and market concerns about a “profit bubble” have been exaggerated. According to data compiled by Bloomberg Industry Research, profits of S&P 500 companies increased by about 30% in the first two quarters of this year, which is one of the strongest performances on record. Earnings growth expectations for the full year are the highest since the post-pandemic economic rebound in 2021. Goldman Sachs's forecast for next year is slightly cautious, and earnings are expected to increase 11%. The strategy team believes that although capital expenditure will continue to rise, the impact of AI investment on profitability will weaken starting in 2027. Snider also anticipates that semiconductor-related companies' profit margin expansion will slow down next year as well. Snider predicts that the S&P 500 index will rise 14% to about 8,700 points in the next year, and the main driving force will be profit growth rather than valuation expansion. At the beginning of this year, he was one of the more optimistic strategists for US stocks, and accurately predicted that strong profits and AI applications would offset the impact of rising oil prices and interest rate hikes, so that the bull market could continue.