GS · News · 20261101N

AI Investment Outlook

GOLDMAN SACHS GROUP INC · 2026-11-01 · Importance 17 · Surprise 24

Goldman Sachs strategists expect S&P 500 earnings growth to slow as AI spending matures and AI-infrastructure earnings growth decelerates. The firm says investors may have priced in excessive optimism, while market leadership could broaden beyond technology as other sectors are rewarded for earnings beats. Strategists Tony Pasquariello and Mark Wilson disagree on whether AI profitability has peaked: Pasquariello cites slowing EPS estimate upgrades and disappointing technology-company earnings, while Wilson points to the trillion-dollar backlog at Google Cloud and AWS as evidence of AI returns. The reports also describe diverging free cash flows among technology giants and hedge funds selling technology stocks rapidly.

Key facts

• Goldman Sachs expects S&P 500 earnings growth to slow significantly as AI spending matures and market leadership shifts away from technology giants. source
• Goldman Sachs noted signs of market broadening beyond tech, with other sectors showing stronger rewards for earnings beats. source
• Goldman Sachs forecasts a deceleration in AI infrastructure earnings growth and overall S&P 500 earnings. source
• Goldman Sachs strategist Tony Pasquariello believes S&P 500 earnings growth has peaked and now is not the time for big bets, citing slowing EPS estimate upgrades and disappointing tech giant earnings. source