Goldman Sachs' calm 2027 forecast comes with a catch

· The Fresno Bee

Gas has dropped below $4 a gallon for the first time since July, according to AAA. Cheaper energy is a big reason Goldman Sachs expects a calm year for the economy in 2027.

The bank’s economists see the global economy growing 2.8% next year, according to a Goldman Sachs research note shared with TheStreet. They call that pace “solid but unremarkable,” with lower oil prices and heavy spending on artificial intelligence doing most of the work.

The catch sits in the report’s own title, “Macro Outlook 2027: Steady Baseline, Downside Risks.” Goldman says the risks to its forecast are “tilted to the downside.” Its biggest uncertainty is the AI spending cycle, which it says poses more risk to the stock market than to the economy.

Also read: Goldman Sachs sees a new problem emerging for the Federal Reserve

That matters for anyone with a 401(k). The AI boom has shaped stock returns far more than everyday life.

The AI boom paid Wall Street more than Main Street

AI spending is the main growth engine Goldman does not expect to change next year. The firm forecasts global AI investment will climb to $1.8 trillion in 2027 from $1.1 trillion this year.

The payoff, however, has landed unevenly. Goldman estimates cloud giants and AI infrastructure companies delivered 62% of S&P 500 earnings growth. AI added only about a fifth of U.S. economic growth, by the bank’s math.

S&P 500 profits now sit at a record share of the economy, the note shows. The key question, Goldman says, is how much of that surge lasts once the investment wave fades.

That question is getting harder to ignore as the boom’s growth nears its peak.

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Slower growth can rattle stocks even without a bust

Goldman expects the yearly jump in AI spending to peak in the first half of 2027. The spending itself keeps climbing into 2028, just at a slower pace.

That sounds harmless, but markets often react when growth slows, not just when it shrinks. Once growth peaks, the upside surprises that excited investors tend to dry up, the note says.

Investors may already be adjusting. Shares of big cloud spenders such as Microsoft (MSFT) and Amazon (AMZN) tended to rise when they raised spending plans. In 2026, that reaction turned slightly negative, Goldman found.

Even so, Goldman is not predicting a bust. It expects S&P 500 earnings to grow 11% next year after a 36% jump in 2026, and positive returns for stocks and bonds.

The trouble is that markets, especially AI stocks, are priced in ways that leave them vulnerable to fading tailwinds, the bank says. It also sees three ways the broader forecast could go wrong.

Three risks could knock the forecast off course

Goldman knows forecasts can miss. It entered 2026 expecting slower inflation before the war with Iran derailed that call, though growth landed close to target.

This time, it flags three threats:

  • A renewed oil shock. In the bank’s adverse scenario, an escalation with Iran pushes Brent crude to $132 a barrel, erasing the energy relief the forecast counts on.
  • Higher bond yields. Long-term rates in major economies sit well above early-2026 levels. If they stay there, Goldman estimates a cumulative 0.5% hit to output through housing, big-ticket purchases and business investment.
  • A weaker AI buildout. Chip shortages, tighter credit, new regulation or softer demand could all slow the spending wave.

The note also carries a warning for workers. Outside manufacturing, industries where more companies use AI now show slower hiring and higher unemployment, Goldman says. That link was not statistically meaningful at the start of the year.

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That is a correlation, not proof, and hiring is holding up for now. Employers added 165,000 jobs in October, according to the Bureau of Labor Statistics.

Still, Goldman warns a downturn would likely speed things up, since it expects bosses to cut “headcount targets more aggressively.”

Earlier Goldman research, reported by Fortune, put possible displacement at up to 9% of workers in the U.S. and other rich economies. The bank expects most displaced workers to find new jobs.

Near term, though, the bank says the bigger risks point to higher prices and rates.

Goldman sees bonds earning their keep again

Consumer prices rose more than economists expected in October, CBS News reported. The bank expects the Federal Reserve to respond with rate hikes in December and March before a first cut in December 2027.

It still sees inflation cooling next year as tariff effects fade by spring. However, pricier memory chips, driven by data center demand, and leftover energy costs could keep prices firm early in 2027, the note warns.

Stubborn inflation and rising rates made 2026 tough for investors who spread their money around. “Through much of 2026, global bonds failed to protect equity portfolios,” the note says.

Now Goldman argues bonds are starting to regain that role, with inflation-adjusted yields at their highest in years. The reason is less comforting. Bonds tend to shine when growth weakens, and the bank sees risks tilting that way as 2027 unfolds.

That leaves a stock market tied more tightly to one spending boom than to the economy around it. The cloud giants’ spending updates, due with quarterly results early next year, may be among the most important signals of 2027.

If the money keeps flowing, Goldman’s calm forecast stands on firmer ground. If it slows faster than planned, the catch could hit portfolios well before it reaches paychecks.

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This story was originally published November 15, 2026 at 9:13 AM.