Goldman Sachs reset S&P 500 price target for 2027

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Goldman Sachs has a number in mind for the S&P 500 next year, and the bank thinks the recent selloff is part of the reason it gets there.

Goldman Sachs is betting that the worst of the tech rout has made stocks worth buying again. The bank expects the S&P 500 to climb to 8,700 over the next 12 months, more than 14% above its last close, arguing that cheaper valuations after the recent selloff should keep returns positive even as profit growth cools.

Wall Street could use some good news. On November 5, a Democratic sweep in the midterms sent the S&P 500 down 4.4%, while the Nasdaq Composite had its worst session since April 2025, sliding into correction territory as traders worried the AI buildout would slow and become pricier.

Jed Ellerbroek of Argent Capital Management called it "the capitulation phase for the data center capex beneficiary stocks," but said "the magnitude of the moves is outsized," as reported by Fox Business. Goldman sees the selloff differently, treating the drop in valuations as an entry point rather than a warning sign.

Valuation sits at the heart of Goldman's case. The S&P 500 was last trading at around 17.7 times its 12-month forward earnings, well below its recent peak of more than 23 times.

Peter Oppenheimer and his team see that reset as an opening rather than a warning. In the bank's 2027 outlook, they wrote that "equities have de-rated sharply," and that with more attractive valuations, stocks should keep rising, though with plenty of volatility along the way, Yahoo Finance reported.

Goldman Sachs also expects the wider backdrop to help, pointing to positive but slower economic and earnings growth along with lower bond yields and inflation. "From here, we expect equities to generate positive returns, albeit with higher volatility than in recent years," the bank said in its November 12 note, according to Reuters.

The picture looked very different earlier this year. Earlier this year, Goldman held a year-end target of 7,600 while the index traded near 21 times forward earnings, above its 10-year average of about 19.1 times.

There is a catch. Goldman thinks profit growth will cool…

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