Goldman Sachs Warns of Sharp 2027 Earnings Slowdown

Goldman Sachs predicts a sharp decline in corporate earnings growth heading into 2027, forecasting a drop from a 36% annual pace in 2026 to 11% in 2027. The investment bank attributes this slowdown to rising interest expenses and a likely peak in artificial intelligence capital expenditure from hyperscalers.

Other financial firms offer varying outlooks on the transition. Raymond James expects a more moderate normalization, projecting S&P 500 earnings per share growth to fall from 28% this year to 23% in 2027. Meanwhile, Ned Davis Research describes the overall earnings outlook as "questionable," noting a decline in the number of companies beating market expectations.

Market instability is further intensified by the departure of Jensen Huang as CEO of Nvidia. His exit has triggered investor uncertainty regarding the future of data center investment and the broader AI trade, compounding the risks of stock market volatility.