Goldman Sachs just raised its S&P 500 year-end target to 8,000 from 7,600, citing explosive growth in artificial intelligence, AI infrastructure spending, and accelerating corporate earnings. The firm also raised its 2026 EPS forecast for the S&P 500 to $340 a share.

“Earnings growth has powered the entire S&P 500 return so far this year, and we expect this dynamic will continue in coming months,” said the firm. “The increase in consensus forward EPS estimates has outpaced the S&P 500 price gain, resulting in a decline in the P/E multiple. In fact, during the past two years, near-term earnings growth has arithmetically accounted for the entire 40% rise in the S&P 500.”

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The firm added that half of that EPS growth will be from AI infrastructure investment alone – which shows no signs of slowing.

  • Amazon (NASDAQ: AMZN), for example, is committing about $200 billion to capex, including a massive $25 billion investment in Anthropic to build out compute infrastructure over the next decade.
  • Alphabet (NASDAQ: GOOG) has plans to invest about $190 billion into AI data centers, software, and development.
  • Meta (NASDAQ: META) is investing about $145 billion in AI capex.

Big Tech Spending Continues to Surge

Consider this. There are about 4,000 operational data centers in the U.S. right now. An additional 1,500 to 3,000 are being planned or under construction. According to Pew Research, the South has 754 planned data centers. The Midwest has 419 planned. The West has 277 planned, and the Northeast has about 106 planned. Globally, there are about 10,807. 

Big tech is pouring hundreds of billions of dollars into data centers to secure a substantial market position. By owning this critical infrastructure, companies ensure they can control the “AI factories” that will power the next generation of software.

Data Center Growth is Exploding

The artificial intelligence boom is still accelerating.

With the global AI market already surpassing $230 billion in 2024, analysts now see a clear path to multi-trillion-dollar expansion—and the next five years may deliver the strongest gains yet.

Forecasts now place AI’s value between $1.7 and $3.5 trillion by the early 2030s, with the most aggressive estimates topping $7 trillion by 2035. And judging by the surge in corporate investment, the market is moving toward the high end of those projections.

Sincerely,

Ian Cooper