Goldman Sachs NYSE:GS strategists have projected another strong earnings season for US companies, with the AI investment boom and windfall energy profits potentially driving the next major test for the market. Analysts expect S&P 500 (SPY) earnings to rise 22% in the second quarter, a hurdle Goldman's team led by Ben Snider said companies should be able to clear as blockbuster profits continue to support this year's rally in US stocks.
The key focus for investors could be whether AI spending beyond the big tech hyperscalers is starting to show real payoff. Goldman said AI infrastructure stocks may contribute nearly 60% of S&P 500 earnings-per-share growth in the quarter, with Micron Technology NASDAQ:MU and Nvidia NASDAQ:NVDA possibly accounting for more than 40%, putting AI-linked results at the center of the upcoming reporting season.
Higher energy prices could also become a major earnings driver, as oil producers are expected to benefit from the jump in crude prices during the quarter, while consumer companies face cost pressures. Goldman said the median S&P 500 company is expected to grow profits by 9%, while Bloomberg Intelligence forecasts point to a roughly 23% second-quarter profit jump, following first-quarter earnings growth of almost 30%.