The S & P 500 will climb to more records this year as earnings continue to grow at a blistering pace, according to Goldman Sachs. The bank raised its year-end S & P 500 target to 8,000 from 7,600. That new forecast implies upside of 6.4% from Tuesday's close of 7,519.12. It also puts it tied for the second highest among strategists included in the 2026 CNBC Market Strategist Survey . Strategist Ben Snider raised his 2026 EPS forecast for the S & P 500 to $340 a share, which equates to a 24% increase in profit this year. "Earnings growth has powered the entire S & P 500 return so far this year, and we expect this dynamic will continue in coming months," he wrote to clients. Year to date, "the increase in consensus forward EPS estimates has outpaced the S & P 500 price gain, resulting in a decline in the P/E multiple. In fact, during the past two years, near-term earnings growth has arithmetically accounted for the entire 40% rise in the S & P 500." The strategist believes that half of that monster EPS growth this year will be from AI infrastructure investment alone. The S & P 500 is already up around 9.8% year to date as AI stocks such as Micron and AMD power the benchmark higher despite worries about the conflict in Iran and rising bond yields. .SPX YTD mountain SPX year to date Snider noted a recent "exceptionally strong" first-quarter earnings season as one of the reasons for his target increase. Indeed, first-quarter S & P 500 earnings grew by more than 28% from the year-earlier period, according to FactSet. That's the strongest profit expansion for the benchmark since the fourth quarter of 2021 — when they surged 32% year on year. Companies are also topping expectations at a stronger pace. FactSet data shows that roughly 84% of S & P 500 names have topped analyst earnings estimates, well above the five-year average rate of 78%. "Going forward, our base case is for a market multiple that remains flat as the valuation tailwind from modestly lower Treasury yields is offset by the valuation headwind from decelerating economic and earnings growth, investor skepticism about the persistence of earnings tied to the AI infrastructure build-out, and continued uncertainty around both AI disruption and the geopolitical outlook," Snider added. Snider sees this earnings momentum staying strong into next year. He raised his S & P 500 EPS forecast for 2027 to $385 a share, which would equate to another 13% increase in profit. He's not alone in thinking earnings will stay strong and keep driving share prices. Earlier this week, Ed Yardeni of Yardeni Research said the market is now being driven by "FEMO," or " fabulous earnings momentum ." Accordingly, the Goldman strategist recommended clients keep buying the stocks with the strongest earnings revisions. "Among firms involved in the AI build-out, the hyperscalers and stocks tied to investment in power infrastructure stand out as attractive opportunities," he wrote. Goldman believes if the geopolitical outlook improves, then the market could overshoot this new base case run to 8,000.
