Goldman Sachs strategists are optimistic about the U.S. stock market in 2027. After large tech stocks experienced a wave of selling that pushed their valuations to historic lows, they predict that the S&P 500 index will rise by 14% in the coming year.
The team led by Peter Oppenheimer has given an overweight rating to the stock markets of the United States and Japan for next year. In their report to clients, they stated that despite expecting a sharp slowdown in earnings growth for the S&P 500 index, they are still optimistic that this benchmark index will rise to 8,700 points within the next 12 months. The S&P 500 index has already risen by 11% so far this year.
As Goldman Sachs made this optimistic forecast, the Nasdaq 100 index was down 9% from its highs at the beginning of October, due to market concerns regarding AI infrastructure, as well as the NVIDIA scandal that led to the resignation of CEO Jensen Huang this week, which dragged down overall performance. Strategists pointed out that this decline has brought the trading valuations of so-called hyperscalable cloud service providers (hyperscaler) "well below" historical levels.
They believe that tech stocks, particularly those of ultra-large cloud service providers, are relatively defensive. It is true that some of these largest companies have experienced negative cash flows, but overall balance sheet indicators such as the net debt to equity ratio are still healthy.
