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Goldman Sees +22% Q2 Profit Growth but Doubts AI-Driven Surprises Will Recur

July 8, 2026 at 07:00 EDT

Finance
Infra & Chips
Sales & Business

Goldman Sachs strategists expect S&P 500 earnings per share (EPS) to grow 22% year over year in the second quarter of 2026, yet warn that the wave of AI-fueled earnings surprises that powered the last reporting season will be hard to repeat.

Q2 2026 Outlook · Goldman Sachs

Strong AI-Driven Earnings Ahead — But the Fireworks May Not Repeat

Goldman strategists forecast S&P 500 EPS up 22% year over year, with AI infrastructure carrying most of the load. After last quarter's broad beat, the bar for surprises is now much higher.

+22%

Q2 EPS growth forecast (YoY)

~60–⅔

Of profit growth from AI infrastructure

$765B

AI CapEx in 2026 alone

Last Quarter's Bar Is Now the Problem

Q1's broad beat lifted expectations — harder to top this time.

85%

Beat EPS
estimates

81%

Beat revenue
estimates

Q1 S&P 500 beat rates — the strong results raised the bar for Q2.

The Build-Out: Cumulative AI CapEx, 2026–2031

A $7.6T baseline, ranging $4T to $8T — each block = $1 trillion.

$4T

Low end

$8T

High end

The Bull Case

Benefits broadening beyond chips toward software and IT services (MSFT, DDOG, SNOW). Strong Q1 beats suggest AI has begun to monetize.

The Skeptic's View

Returns still lag spending; benefits concentrated in chipmakers. CapEx running ahead and pressuring free cash flow — ROI unproven.

The Key Question

The AI theme continues — but will the investment pay off?

In 2023, Goldman estimated generative AI could lift global GDP by 7% (~$7 trillion). By 2026, the focus has shifted to proving that companies can earn returns commensurate with what they spend.

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