Goldman Sachs sees S&P 500 gaining 14% as megacap tech valuations cheapen
A recent selloff in the largest technology companies is reshaping Goldman Sachs' outlook for U.S. equities in 2027. The bank's strategists now expect the S&P 500 to reach 8,700 points over the next 12 months, even as profit growth for the benchmark slows sharply.
Highlights
- Goldman Sachs forecasts the S&P 500 to gain 14% and reach 8,700 points in 12 months, citing cheap megacap tech valuations.
- Goldman maintains an overweight stance on U.S. and Japan equities for 2027, favoring selective regional exposure amid softer profit growth expectations.
- The S&P 500 has risen 11% in 2026 so far, bolstering Goldman Sachs's constructive near-term outlook on U.S. equities despite earnings growth slowing.
2027 allocation call and index target
As reported by Bloomberg, Goldman Sachs Group Inc. strategists are bullish on U.S. stocks for 2027 and say weaker valuations among hyperscale technology companies create room for further gains. The team led by Peter Oppenheimer says in a note to clients that it is overweight on the U.S. and Japan for next year.The strategists expect the S&P 500 to advance 14% over the coming year, with the benchmark reaching 8,700 points in the next 12 months. Their view comes after a selloff in the biggest technology names left valuations at historically cheap levels.
Market context and earnings outlook
The forecast suggests Goldman sees valuation support offsetting a softer profit backdrop in the broader U.S. market. While the bank expects earnings growth for the S&P 500 to slow sharply, it still argues that current pricing in major technology stocks supports a constructive stance on equities.The S&P 500 is up 11% so far in 2026, providing a stronger base for the bank's 2027 market call. Goldman also favors Japan alongside the U.S., indicating a selective regional allocation strategy rather than a broad bullish view across all major markets.
Earlier, we outlined the key risks in our S&P 500 consolidation outlook as tech weakness fueled a risk-off rotation.
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