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Goldman tells clients the profit boom is a cyclical peak, not a bubble

The bank's chief US equity strategist expects earnings growth to decelerate rather than collapse as the AI capex tailwind fades.

Assembled by Claude from 10 sources at 9 outlets · Saturday, September 19, 2026, Morning edition, 10:12 AM EDT · no human byline

Disclosure. This item was assembled by an AI from the RSS excerpts of the outlets tagged inline. No human wrote or checked it before publication. Feed selection and categories are editorial choices by Teresa Lo. Nothing here is investment advice.

What happened

Goldman Sachs chief US equity strategist Ben Snider pushed back on the idea that US corporate profits are in a bubble finance.yahoo.com. "Our base case is for S&P 500 earnings growth to decelerate, not collapse, in coming years," he wrote in a client note benzinga.com.

The starting point is unusually high. Snider noted that S&P 500 earnings per share grew 51 per cent in the second quarter and 26 per cent over the past four quarters, lifting profits well above trend finance.yahoo.com. That pace suggests companies are over-earning as AI investment surges finance.yahoo.com. His team attributes the above-normal earnings to three temporary factors, AI-related effects among them kucoin.com, which one summary described as hyperscaler capex, high memory margins and non-operating income longbridge.com.

Why it matters to investors

The bank has put a number on the deceleration. Snider's team forecasts S&P 500 earnings per share growth of 11 per cent in 2027 and 2028 binance.com, a sharp step down from the current run rate finance.yahoo.com. That is the bull case stated plainly: a slowdown to a normal growth rate rather than a reversal. It also concedes the bears' premise, that the present level of profitability is not sustainable, while disputing only the shape of the descent finance.yahoo.combenzinga.com.

The tailwind has a visible end date. Goldman warns that AI spending will not sustain stock-market momentum into 2027, with S&P 500 earnings slowing as capex wanes uk.finance.yahoo.com. Business Insider framed the same research as the uncomfortable truth the capex boom has been masking businessinsider.com. Snider's own caveat is that while there are indeed factors contributing to over-earning today, the base case is for deceleration detroitnews.com.

What to watch

Not everyone on the street is as calm. The veteran market strategist Wood, speaking to CNBC-TV18, expressed apprehension about the enormous amounts being invested in AI by American hyperscalers and warned of massive capital destruction in the United States tradingview.com. That is the tail the Goldman base case excludes rather than refutes benzinga.comtradingview.com. The two views are not reconcilable by argument, only by the capex schedule itself uk.finance.yahoo.comtradingview.com.

Three things test the thesis. Whether hyperscaler capex plateaus on the schedule Goldman assumes uk.finance.yahoo.comlongbridge.com; whether memory margins and non-operating income normalise together or separately longbridge.comkucoin.com; and what replaces AI capex as an earnings driver once the temporary factors roll off kucoin.combinance.com.

Sources

  1. finance.yahoo.com: Goldman's Snider Says Fears of US Earnings Bubble Are Misplaced - Yahoo Finance (2026-09-18)
  2. finance.yahoo.com: Is the S&P 500 in an “earnings bubble”? Goldman weighs in - Yahoo Finance (2026-09-18)
  3. benzinga.com: Goldman Sachs: This Isn't A Bubble, Just A Cyclical Peak - Benzinga (2026-09-18)
  4. binance.com: STOCKS | Goldman Sachs Sees S&P 500 Earnings Growth Slowing, Not Crashing (2026-09-18)
  5. uk.finance.yahoo.com: The AI capex boom won't sustain S&P 500 earnings much longer, Goldman says (2026-09-19)
  6. businessinsider.com: AI Capex Boom Masks an Uncomfortable Truth About S&P 500 Earnings - Business Insider (2026-09-19)
  7. kucoin.com: Goldman Sachs Report: Earnings Growth Surpasses Expectations; AI Windfall to Decline by 2027 (2026-09-18)
  8. detroitnews.com: Wall Street slips as higher Treasury yields weigh on sentiment - The Detroit News (2026-09-18)
  9. longbridge.com: Goldman Says Sky-High Profits Aren't A Bubble , Just A Cyclical Peak - Longbridge (2026-09-19)
  10. tradingview.com: AI Capex Boom Risks 'Massive Capital Destruction' in the US, Warns Veteran Market Strategist (2026-09-18)