Goldman Sachs Forecasts S&P 500 Rise to 8,700

Goldman Sachs forecasts the S&P 500 will reach 8,700 points over the next 12 months, an increase of more than 14% from its recent close of 7,592.40. The brokerage maintains an overweight rating for the United States and Japan, while remaining neutral on Asia and emerging markets and underweight on Europe.

This projection follows a sharp selloff in major technology companies triggered by Democratic wins in the U.S. midterm elections and concerns regarding data center buildouts. Market volatility in the AI sector was further intensified by the resignation of Nvidia CEO Jensen Huang following reports of alleged extramarital affairs.

Despite the current instability, the firm attributes the potential for positive returns to more attractive valuations. However, it expects a slowdown in earnings growth, noting that U.S. rates could drop to 11% from 36% in 2027 as hyperscaler capital expenditure eases.