The S&P 500 has climbed to near-record highs despite growing concerns about valuations, AI spending, and signs of speculative behavior across parts of the market.
The S&P 500 has rallied 8% year to date, after delivering double-digit gains in 2023, 2024, and 2025
Investors have recently watched Micron reach a $1 trillion valuation, shares of SanDisk and Intel soar, and demand for a potential SpaceXIPO reach a fever pitch. At the same time, the market suffered a sharp pullback on June 5 as investors questioned whether the AI trade had gone too far. Goldman Sachs believes the recent volatility has not changed the bigger picture. “The path will remain bumpy, but earnings growth should continue to lift US equities,” Goldman analysts wrote in a recent note sent to TheStreet.
The firm expects the S&P 500 index to rise another 8% by year-end, reaching 8,000. Earnings growth is the fundamental bull engine While investors debate valuations and AI spending, Goldman says that corporate earnings remain the most important factor. “Earnings growth should continue to lift US equities,” the firm wrote. Goldman expects S&P 500 earnings per share to grow 24% in 2026 and another 13% in 2027.