Goldman Sachs says the market's missing the 2026 boom — and a few sectors are poised to heat up

• Goldman Sachs is calling a 2026 earnings boom — and says the market isn't ready.
• The biggest winners may be boring cyclical stocks, not the AI titans.
• AI is dominating the headlines, but its earnings impact is tiny compared with the coming macro boom.

Investors are fixated on artificial intelligence and the mega-cap tech giants driving much of the stock market's gains. But Goldman Sachs says the bigger opportunities next year may come from somewhere else.

"At the sector level, we expect the 2026 acceleration in economic growth will boost EPS growth most in cyclical sectors including Industrials, Materials, and Consumer Discretionary," Goldman's analysts wrote in a Thursday report. The analysts noted that the firm's broader forecast also incorporates easing tariff pressures.

In line with that view, the analysts said that they expect earnings per share of real estate companies to rise from 5% this year to 15% next year, while those in consumer discretionary are expected to increase from 3% to 7%.

Industrial companies are also set for a major rebound, with EPS growth forecast to accelerate from 4% to 15%.

By contrast, Goldman expects EPS growth for information technology companies to moderate from 26% in 2025 to 24% in 2026.

Signs of this shift are already showing up in market action.

In a separate Friday report, Goldman noted that cyclical stocks have surged, beating defensive names for 14 trading days through Thursday — the longest streak in more than 15 years.

Even so, Goldman analysts say the recent outperformance still isn't enough to reflect the firm's more optimistic growth outlook. Market positioning within equities suggests investors expect growth closer to 2% — well below Goldman's 2.5% forecast.

"Despite the cyclical rebound and widespread economic optimism in our client conversations, the market does not appear to be fully pricing the likely economic acceleration in 2026," the analysts wrote.

That acceleration is central to Goldman's view. The bank's analysts wrote that they expect overall US growth to pick up next year, which would help drive a 12% rise in S&P 500 earnings per share.

Goldman's latest reports arrive as investors continue to debate whether the stock market is drifting into a speculative bubble fueled by AI enthusiasm.

The S&P 500 is up 16% this year, with the "Magnificent Seven" megacap tech stocks now accounting for roughly one-third of the index's weight.

Shares of AI chip maker Nvidia — the world's most valuable publicly traded company — have climbed 30% this year alone.

Last month, Goldman's analysts wrote that the market may have already priced in most of the potential gains from AI.