Analysts Project S&P 500 Earnings Growth Slowdown in 2027

Wall Street analysts project a significant deceleration in S&P 500 earnings growth for 2027, with estimates dropping to roughly 15% from the 32% to 35% growth expected in 2026. This shift is driven by a projected slowdown in artificial intelligence capital expenditures among hyperscalers and rising depreciation costs from previous infrastructure investments.

Goldman Sachs expects AI capital expenditures to increase from $800 billion this year to $1.1 trillion next year, though the growth rate will be less aggressive than in 2026. Data from FactSet and Refinitiv Limited indicate that the market is currently trading at elevated levels, with a Shiller CAPE ratio exceeding 40.5.

Investment professionals warn that these valuations leave little room for error. Walter Todd, Chief Investment Officer of Greenwood Capital, noted that while earnings have been strong, comparisons will be difficult for many companies next year and questioned the durability of current growth figures. Analysts suggest that any doubt regarding the future trajectory of earnings could trigger a market sell-off.