U.S. corporate earnings are experiencing a period of exceptional strength, according to Goldman Sachs executives speaking at the firm's RIA Professional Investor Forum in New York on Tuesday. Lindsay Rosner, head of multi-sector investing at Goldman Sachs, described the recent earnings run as "absolutely remarkable," noting that corporate resilience is feeding into the broader economy.
Ben Snider, Goldman Sachs' chief U.S. equity strategist, provided specific data to support that view. He said S&P 500 earnings for the first quarter, excluding items like private equity stake revaluations, are tracking up 17% year-over-year. "That's going to be the best quarter in 15 years outside of the COVID reopening and the boost from tax cuts in 2017," Snider added.
Unlike recent periods where a handful of mega-cap stocks drove overall performance, Snider emphasized the breadth of the current earnings season. The median S&P 500 company—stock number 250 by market cap—is reporting earnings growth of 14% year-over-year. "The picture has been very good," he said.
The S&P 500 index has climbed more than 26% over the past 12 months and closed at a new all-time high on Monday. Technology and artificial intelligence have been major catalysts. Snider pointed to an extraordinary surge in capital spending: analysts now project $750 billion in hyperscaler capex this year, an increase of $100 billion from estimates just a few weeks ago. "One company's capex is another company's revenues," he noted, explaining that this spending has boosted semiconductor stocks and lifted first-quarter results.
Major tech firms have delivered standout performances. Microsoft, Alphabet, Amazon, and Meta all reported revenue gains, while Apple posted strong fiscal second-quarter results. Nvidia shares have risen more than 17% year-to-date, Broadcom is up over 19%, and Intel has surged 221%.
However, the picture is not uniformly positive. Snider acknowledged "pretty poor" consumer sentiment, citing the University of Michigan's Consumer Sentiment Index, which registered a record low of 48.2 earlier this month. McDonald's has flagged challenges among lower-income consumers, and Planet Fitness cut its full-year revenue guidance. Rising inflation continues to pressure household budgets.
Despite these headwinds, the sheer weight of technology earnings is overwhelming other sectors. Snider noted that energy and consumer stocks together account for about 20% of S&P 500 earnings, while technology represents 40%. "The huge technology sector tailwinds are easily outweighing any other headwinds that Goldman Sachs is seeing," he said.
For advisors, the data suggests that corporate fundamentals remain robust even as macroeconomic uncertainty persists. The combination of strong earnings growth and record equity levels may provide a cushion against volatility, though some strategists caution that hedging strategies may be overpriced relative to actual tail risks.
Goldman Sachs' outlook aligns with broader market trends. A recent BlackRock study showed U.S. corporate pension funding reached 108%, though gaps between well-funded and underfunded plans widened. Meanwhile, annuity sales topped $100 billion for the tenth consecutive quarter, reflecting continued demand for guaranteed income.
