Goldman Sachs expects recent turbulence in artificial intelligence stocks to settle as corporate earnings remain supportive of the broader market. Strategist Ben Snider said strong profits and improving forecasts could help the bull market withstand swings in momentum-driven technology shares.
Goldman said companies representing about two-thirds of the S&P 500's market value had reported second-quarter results by July 31. About 64% exceeded earnings expectations by at least one standard deviation, while aggregate earnings growth reached 26% after excluding unusually large investment gains from some technology companies.
AI infrastructure remains an important earnings driver. Goldman estimates the group contributed roughly one-third of second-quarter S&P 500 profit growth and could represent more than half of growth through the rest of 2026 and into 2027. Alphabet NASDAQ:GOOG, Amazon NASDAQ:AMZN, Microsoft NASDAQ:MSFT, Nvidia NASDAQ:NVDA and Broadcom NASDAQ:AVGO are among the major contributors.
Spending is also accelerating. Goldman expects hyperscaler capital expenditures to top $1 trillion in 2027. The firm said Alphabet, Amazon and Microsoft posted combined cloud revenue growth of 48% in the latest quarter, up from 39% previously. Goldman cautioned that rising costs and elevated expectations could still keep volatility high.