Goldman sees global earnings growth roughly halving in 2027

what happened

Goldman Sachs Portfolio Strategy Research expects global equity earnings growth to fall by more than half in 2027, as spending on artificial intelligence reaches its peak. In 2026, profits rose across most regions, helped by strong tech results, higher oil prices for energy producers and knock-on demand for industrial firms.

The bank's top-down forecasts put 2027 EPS growth for the S&P 500 at 16%, down from 32%. Europe is seen slowing from 24% to 8%, Japan from 22% to 13%, and Asia Pacific ex-Japan from 77% to 30%. The main drag is a slowdown in hyperscaler capex, while rising depreciation and higher borrowing costs weigh on margins.

Valuations have already adjusted. Global price-to-earnings ratios are near their 35-year averages, and large U.S. hyperscalers trade at about 19.7 times forward earnings, below traditional defensive sectors such as consumer staples.

why it matters

For investors, the message is that earnings leadership is likely to narrow after a broad 2026 rally. Goldman favors the U.S. and Japan, stays neutral on Asia ex-Japan and emerging markets, where Korean and Taiwanese chip stocks add volatility, and is underweight Europe over government debt and a busy political calendar.

market impact

Global equities: slower expected 2027 profit growth weighs on tech valuations

instruments

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