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(Bloomberg) -- Veteran market strategist Ed Yardeni of Yardeni Research dismissed concerns that US stocks are in a bubble, arguing the rally is driven by “fabulous earnings momentum” rather than speculation. Most Read from Bloomberg Iran’s Khamenei Says No Going Back for Middle East Rocked by War Singapore Hands Byju's Founder His First Ever Jail Term Putin Signs Law on Use of Army to Aid Russians Detained Abroad Russia Tells US to Evacuate Its Diplomats and Citizens From Kyiv Ex-President Biden Sues to Stop DOJ Sharing Interview Tapes “The big difference is earnings,” Yardeni said Wednesday on Bloomberg Television’s Surveillance, adding that the forward price-to-earnings ratio for the S&P 500, at 20 to 22, looks reasonable if the economy avoids recession over the next few years. He coined the term “FEMO” — fabulous earnings momentum — to distinguish the current rally from “FOMO,” or fear of missing out, which he said is based on hope and hype rather than fundamentals. Yardeni, president and chief investment strategist for the firm that bears his name, acknowledged the market feels like a “meltup” with some semiconductor stocks rising sharply. He expects the S&P 500 to reach 10,000 by the end of the decade, representing a 33% run-up, in what he calls the “roaring 2020s” scenario. Yardeni said he has seen only one meaningful selloff this year, in March, and doubts another will occur before year-end. His FEMO thesis helps underpin his 2026 S&P 500 target at 8,250. That’s the highest among analysts tracked by Bloomberg, though the band of bulls seeing at least 8,000 expanded again when Goldman Sachs Group Inc. strategists raised their year-end estimate to 8,000 from 7,600. Regarding US inflation, Yardeni said the current spike is related to higher crude costs but lacks the wage-price spiral seen in 2022. He expects productivity growth to accelerate to 3% or 4% from the current three-year average of more than 2%, which would offset wage pressures and keep unit labor cost inflation near zero. Year-over-year unit labor cost inflation currently stands at 1.2%, he said. Oil markets have stabilized around $100 per barrel despite the blockade of the Strait of Hormuz, Yardeni said, with the US and Venezuela exporting more crude while China’s economy appears weaker than recognized. (This story was produced with the assistance of Bloomberg Automation.) Most Read from Blo...

May 26 (Reuters) - Goldman Sachs has raised its 2026 year-end forecast for the S&P 500 index ‌to 8,000 from 7,600, citing continued strength in ‌corporate earnings. The target is 6.4% higher than the index's last close ​of 7,519.12. "Earnings growth has powered the entire S&P 500 return so far this year, and we expect this dynamic to continue in the coming months," Goldman Sachs said ‌in a note ⁠on Tuesday. The brokerage also raised its S&P 500 earnings-per-share forecasts to $340 for 2026, implying 24% ⁠year-on-year growth, and to $385 for 2027, a further 13% increase. Goldman’s move adds to a growing wave of bullish ​calls from ​brokerages, with UBS GWM ​the latest to lift ‌its outlook last week, citing robust AI-driven earnings that could help offset inflationary pressures and supply risks from the Iran conflict. The brokerage said AI infrastructure beneficiaries are set to drive about half of the index’s earnings growth ‌this year, adding that while ​weak consumer spending and elevated ​costs pose risks, strong ​AI investments would offset these pressures. "In addition, ‌while S&P 500 earnings estimates ​have risen ​more quickly than index price appreciation, the semiconductor stocks at the heart of the AI infrastructure complex ​have recently outpaced ‌their forward earnings," analysts at Goldman Sachs said. (Reporting ​by Kanishka Ajmera in Bengaluru; Editing by ​Sherry Jacob-Phillips and Rashmi Aich)

(Bloomberg) -- Strategists at Goldman Sachs Group Inc. joined peers at Morgan Stanley and Deutsche Bank AG in seeing a 17% return for the S&P 500 Index this year. Most Read from Bloomberg Iran’s Khamenei Says No Going Back for Middle East Rocked by War Singapore Hands Byju's Founder His First Ever Jail Term Putin Signs Law on Use of Army to Aid Russians Detained Abroad Russia Tells US to Evacuate Its Diplomats and Citizens From Kyiv US Strikes Targets in Iran Even as Trump Hails Progress on Deal Earnings growth powered by the AI boom will drive further gains in stocks, the Goldman team led by Ben Snider said as they increased their year-end target for the US benchmark to 8,000 points, ditching a previous forecast of 7,600. “Continued earnings growth should drive continued equity market upside,” the strategists wrote in a note. “The increased return forecast reflects increased estimates for S&P 500 earnings following an exceptionally strong first-quarter reporting season.” The S&P 500 has already jumped almost 10% this year thanks to a rally in tech stocks as investors prioritize strong earnings over the geopolitical and economic fallout from the Iran war. The US benchmark hit its latest record high on Tuesday, closing at 7,519 points. The Goldman strategists also increased their earnings-per-share forecast for companies in the S&P 500 to $340 for 2026, signaling year-on-year growth of 24%. They project a further increase of 13% for 2027. Beneficiaries of artificial intelligence infrastructure investment should account for roughly half of S&P 500 EPS growth this year, the strategists said. Meanwhile, increases in valuations should be tempered by risks to the outlook, they said. “The combination of decelerating earnings growth and continued uncertainty around both AI and the macroeconomic outlook should prevent a major increase in valuations,” the strategists wrote. “AI sentiment and interest rates create risks in both directions.” (Adds Tuesday’s closing level for the S&P 500 in fourth paragraph.) Most Read from Bloomberg Businessweek How Barnes & Noble Became Private Equity’s Most Radical Retail Experiment America Can’t Produce Enough Honey ICE Raids Did Lasting Damage to American Businesses Courts Are Swamped With AI-Powered Do-It-Yourself Lawsuits It’s Such a Mess Shopping for Reasonably Priced Menswear ©2026 Bloomberg L.P.

This article first appeared on GuruFocus. Goldman Sachs sees artificial intelligence spending becoming a major engine for S&P 500 earnings growth over the next two years, with companies tied to the buildout expected to drive about half of index EPS growth in both 2026 and 2027, the firm said. Goldman Sachs said the biggest direct winners remain chipmakers. Nvidia and Micron Technology together are expected to account for about one-third of S&P 500 EPS growth this year, reflecting how deeply AI infrastructure is feeding into semiconductor demand. Warning! GuruFocus has detected 2 Warning Sign with MSFT. Is SPY fairly valued? Test your thesis with our free DCF calculator. Goldman Sachs said the benefits are not limited to semiconductors. Tech hardware makers, industrial companies and utilities are also getting a lift as data center construction accelerates and electricity demand rises across the AI supply chain. Goldman Sachs also warned that the earnings boost will not be fully clean. It said rising depreciation costs at hyperscalers, the large cloud providers spending heavily on AI, will partly offset the upside, with that drag likely becoming more visible in 2027 than in 2026.

It is shaping up to be a massive year for initial public offerings (IPO). SpaceX recently confirmed that it plans to go public next month in what is expected to be the largest IPO ever, with Goldman Sachs (NYSE: GS) serving as the lead underwriter. Over the past year, capital markets activity, which includes IPOs and mergers and acquisitions (M&A), has picked up amid strong public markets and a favorable regulatory backdrop. Goldman Sachs posted excellent first-quarter results, and the stock rose modestly after the earnings report. With that said, I think the investment bank stock could be a better buy than Wall Street thinks. Here's why. Goldman Sachs is one of the largest investment banks in the United States and leans heavily on capital markets for its business. The bank struggled a few years back, when capital markets activity slowed to a crawl while its consumer banking business struggled. The culprit was high interest rates and heavy regulatory scrutiny, which made companies more hesitant about pursuing major deals or IPOs. Over the past year, companies have found it easier to make deals thanks to faster regulatory approvals and strong equity markets. Streamlined regulatory processes have helped boost deals and enabled investment banks to get things done faster than expected, months ahead of schedule. In December, Goldman Sachs closed out the year with its largest backlog in over four years, showing that markets have finally opened up, paving the way for mega-IPOs and mega-mergers. The company posted blowout earnings in the first quarter, as equity underwriting revenue rose 45% year over year to $535 million, while advisory revenue surged 89% to $1.5 billion. Even though Goldman saw impressive growth, CEO David Solomon noted that there was an "extraordinary replenishment" of its backlog and noted that it has a "very full pipeline" of large-scale deals to be made. One driver of the surge is mega-deals, as many companies have stayed private over the past several years and have finally reached a point where they are massive in scale and need to access capital markets. On top of that, equity markets have remained resilient despite geopolitical uncertainty, providing a favorable backdrop for companies to go public. According to Renaissance Capital, 99 IPOs have been filed this year, up 6% from last year. Meanwhile, IPOs have raised $28.8 billion in proceeds...

We recently compiled a list of the 8 Most Oversold Large Cap Stocks to Buy. Insulet Corporation (NASDAQ:PODD) is one of the most oversold stocks. TheFly reported on May 7 that PODD saw its valuation outlook revised as Goldman Sachs reduced its price target to $237 from $277 while maintaining a Buy rating on the shares. The firm noted that the company’s first-quarter results and updated guidance initially appeared strong, but concerns emerged regarding the growth trajectory after second-quarter U.S. revenue guidance came in below full-year expectations, and annual targets were only reiterated despite a first-quarter beat. Management also attributed the slower-than-expected start to the year to stronger seasonality effects linked to insurance deductible resets, which impacted early demand trends. Moreover, earlier, on May 4, Insulet Corporation (NASDAQ:PODD) reported the enrollment of the first participant in its EVOLVE study evaluating a fully closed-loop automated insulin delivery system for individuals with type 2 diabetes. The study represents an important step in advancing next-generation diabetes management technology. The system is designed to automatically adjust insulin dosing through an advanced algorithm trained on both real-world and simulated patient data, aiming to improve safety and glucose control while reducing the burden on patients and healthcare providers. The development reflects PODD’s continued focus on innovation in diabetes care solutions. Insulet Corporation (NASDAQ:PODD) is a medical device company based in Acton. It develops the Omnipod tubeless insulin delivery system, including Omnipod 5, which helps people with diabetes manage insulin more easily and effectively. While we acknowledge the potential of PODD as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best Cancer Stocks to Buy for the Long Term and 10 Most Popular Stocks on Robinhood in 2026. Disclosure: None. Follow Insider Monkey on Google News.

(Bloomberg) -- Chinese consumption probably expanded far slower than the pace of industry in April, as trade remained the bright spot despite the global reverberations from the Iran war. Most Read from Bloomberg Hormuz Oil Flows Creep Higher as More Supertankers Exit Iran’s Kharg Island Oil Jetties Empty Again Yesterday, Satellite Shows What Is The Thucydides Trap and Why Did Xi Raise It With Trump? Nigerian Tycoon Femi Otedola Buys £53 Million London Mansion Trump Says China Offered Help on Iran as Ship Taken Near UAE Data due Monday will show retail sales rose 1.9% last month from a year earlier, according to the median forecast of economists surveyed by Bloomberg. That would follow a 1.7% rise in March, extending one of the worst starts to any year outside the pandemic. Industrial production likely expanded 6%, up from 5.7% in the prior month. Previously reported data showed exports surged 14.1% last month. Taken together, the monthly figures would show a similar pattern to China’s economy in the first quarter, when it had a surprise acceleration in growth. “We expect the K-shaped divergence to extend into April,” Citigroup Inc. economists led by Xiangrong Yu wrote in a note previewing the data. “Industrial production remains buoyant” but that’s “contrasting with sluggish domestic demand,” they said. While the “K-shaped” discussion in the US centers on lower-income households getting left behind, in China the issue relates to domestic consumers as a whole. Similar discrepancies have emerged across Asia, in countries such as South Korea — especially as the spoils of a global boom in artificial intelligence bypass large parts of the workforce. China’s exports are expected to remain strong, supported by the global AI investment cycle and robust demand for renewable‑energy products amid disruptions to the oil and gas industries because of the war in Iran. Stabilizing trade ties with the US, likely reinforced by President Donald Trump’s visit to Beijing, further bolster the outlook. In contrast, chronic weakness in the jobs market has been a major obstacle for Beijing’s efforts to revive confidence among households in the face of a prolonged property crisis. The Middle East conflict is also squeezing corporate profits as firms struggle to pass on higher costs to customers, adding to uncertainty around hiring. Chinese policymakers have appeared to be taking a w...

A month has gone by since the last earnings report for The PNC Financial Services Group, Inc (PNC). Shares have lost about 3% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is The PNC Financial Services Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers. PNC Financial has delivered adjusted earnings per share of $4.32 in the first quarter of 2026, beating the Zacks Consensus Estimate of $4.12 and up from $3.51 a year ago. Results reflected higher net interest income, a rise in the net interest margin (NIM), and strong loan and deposit growth, aided by the FirstBank acquisition (completed in January 2026). However, higher expenses were headwinds. Results excluded certain non-recurring charges. After considering those, net income (GAAP basis) was $1.77 billion, which rose 18.2% from the year-ago quarter. Revenues & Expenses Rise Quarterly revenue came in at $6.2 billion, up 13% year over year while missing the consensus mark by 0.5%. NII rose to $4 billion in the quarter, increasing nearly 14% from the year-ago period. PNC’s NIM improved to 2.95%, expanding 17 basis points year over year, as the bank benefited from lower funding costs and loan growth. Non-interest income totaled $2.2 billion, up 11.5% from the first quarter of 2025, reflecting broader improvement across several fee categories. Within fee income lines, capital markets and advisory revenues rose sharply from last year, while residential and commercial mortgage revenues declined year over year. Non-interest expenses increased to $3.8 billion, up 11.2% year over year. The rise largely reflected FirstBank’s operating and integration expenses, increased business activity, and continued investments to support growth. PNC incurred $98 million of integration costs (pre-tax) in the quarter related to the FirstBank acquisition, and management noted that expense growth was notably more modest, excluding integration expenses. The efficiency ratio was 61% compared with 62% in the prior-year quarter. Loan and Deposit Balance Rises The balance sheet expansion was notable following the closure of the FirstBank deal. Total loans increas...

The country’s largest banks, flush with record earnings and capital, executed their largest quarterly stock repurchases ever in the first three months of the year. The 21 large banks covered by Barclays analyst Jason Goldberg bought back $40 billion in the first quarter, up from $34 billion in the fourth quarter of 2025 and from the prior record of $38 billion in the 2019 fourth quarter, just before the Covid crisis. The industry leaders, based on the biggest percentage reductions in share counts in the first quarter, were M&T Bank (3.9% reduction), First Citizens Bancshares (3.8%), Citi group (3.1%), Bank of America (1.9%), and Goldman Sachs Group (1.8%).

Goldman Sachs just spotted a problem that’s hiding inside a remarkably good earnings figure. According to Seeking Alpha, S&P 500 companies apparently posted a blowout Q1 earnings figure, where growth neared 25%. However, Goldman Sachs said the figure was boosted by investment gains at Amazon (AMZN) and Google parent Alphabet (GOOGL). Take those gains away, and you are arrive at far less impressive number. For Amazon, the bump came from a $16.8 billion pre-tax gain linked to its investment in AI bellwether Anthropic , booked in non-operating income. That bumped its net income to $30.3 billion, beating Wall Street estimates again by a handsome margin. For Alphabet, the gain was even bigger, with $37.7 billion in other income, mostly from unrealized gains on non-marketable securities, leading to net income jumping 81% to $62.6 billion and EPS rising 82% to $5.11. Earnings headlines are a critical gauge for investors to judge whether stock prices are overbought and corporate profits are sustainable. Amazon and Alphabet can heavily influence the numbers because their massive market caps give them outsized weight in the S&P 500 index. Essentially, the market might still be growing, but clearly there’s a lot more concentration than the headline suggests. For perspective, both tech behemoths killed it when they reported their Q1 earnings recently. Amazon’s Q1 net sales jumped 17% to $181.5 billion. Amazon Web Services sales also surged 28% to $37.6 billion, its fastest growth in 15 quarters. Similarly, operating income shot up to $23.9 billion, while net income also climbed to $30.3 billion, led by a massive Anthropic investment gain. Alphabet also showed a ton of strength. Sales ballooned by 22% to $109.9 billion, Google Search grew 19%, and Google Cloud surged 63% to $20 billion. Cloud backlog also doubled to over $460 billion, underscoring the relentless appetite for AI. Nevertheless, even though those two businesses performed well in Q1, Goldman’s point is that their strength is masking a far less explosive earnings picture across the broader market. In the 1-month period, Amazon returned 26.85%, compared with 32.6% for Alphabet. In the 3-month period, Amazon returned 28.93%, compared with 23.36% for Alphabet. Year to date, Amazon returned 17.48%, compared with 27.4% for Alphabet. In the 1-year period, Amazon returned 43.70%, compared with 144.67% for Alphabet....

This article first appeared on GuruFocus. Jane Street Group has delivered the kind of quarter that forces investors to look again at the shifting power structure inside Wall Street trading. The private market maker generated $16.1 billion of trading revenue in the first three months of the year, more than double its haul from the first quarter of 2025, according to people familiar with the matter. Net income also more than doubled from a year earlier to $10.3 billion. That scale matters because Jane Street had already set a record in 2025 with $39.6 billion of trading revenue, outpacing major Wall Street peers including Goldman Sachs Group Inc. (NYSE:GS) and JPMorgan Chase & Co. (NYSE:JPM). With the first-quarter haul alone representing more than 40% of last year's total, the firm could be positioned to extend its record-setting run if market conditions remain supportive. Warning! GuruFocus has detected 5 Warning Signs with CRWV. Is CRWV fairly valued? Test your thesis with our free DCF calculator. The bigger story for investors is not just the number, but what it says about where trading profits are moving. Jane Street, founded in 2000, handles investor trades while also taking positions with its own capital. Like other high-frequency firms, it has built systems capable of processing thousands of trades within seconds, but its model also includes positions held for hours, days and even weeks. That blend appears to be working in a volatile market backdrop. The first three months of the year fueled strong quarters across trading desks, with JPMorgan's stock traders helping push total trading revenue past the bank's previous record by almost $2 billion. But unlike too-big-to-fail banking peers, firms such as Jane Street do not face the same capital restrictions, which could be one reason they have gained influence in the post-financial crisis era. Jane Street's first-quarter results were driven by medium-frequency strategies, according to one of the people familiar with the matter, meaning machine-powered positions held for days or weeks. The firm's revenue has also been helped by private, longer-term investments in artificial intelligence and technology companies. One of those holdings is CoreWeave Inc. (NASDAQ:CRWV), which was up 8% in the first three months of the year. Jane Street also has a stake in Anthropic PBC, which has begun weighing a fresh funding...

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is executing a deliberate transition of the balance sheet, moving away from legacy positions toward originations sourced through the integrated Goldman Sachs private credit ecosystem. The post-integration portfolio (58% of fair value) is performing in line with expectations, with only one name representing less than 0.5% of total nonaccruals at cost. Credit volatility is heavily concentrated in the legacy portfolio (42% of the book), which accounted for 72% of losses this quarter and over 99.5% of total nonaccruals. Management distinguishes between mark-to-market fluctuations driven by widening market spreads and true credit impairment resulting from borrower deterioration. The company has intentionally reduced exposure to Annualized Recurring Revenue (ARR) loans from nearly 39% in 2022 to under 10% today, favoring cash-flow-supported structures. A risk-off market sentiment in Q1 drove U.S. private equity deal value to its lowest level since Q2 2025, with sponsor activity remaining below 10-year averages. Management expects to reinvest proceeds from recent exits at wider spreads and more attractive risk-adjusted levels due to current market dynamics. The company anticipates a continued reduction in the legacy portfolio percentage, allowing for redeployment into the 'OneGS' ecosystem. Future dividend coverage is expected to be supported by a more muted incentive fee accrual in coming quarters due to the three-year total return lookback mechanism. While a stable rate environment may assist recovery over time, management remains uncertain regarding the immediate recovery of middle-market M&A activity. The firm is proactively managing legacy ARR positions through strategic exits or facilitating conversions to EBITDA-based loans as companies mature. Nonaccruals increased to 4.7% of the portfolio at amortized cost, up from 2.8%, driven by two legacy investments: 1GI LLC and 3SI Security Systems, Inc. The Board authorized a new $75 million stock repurchase program to be entered into once the 2025 plan is fully utilized or expires. Net asset value (NAV) per share declined 3.7% from the prior quarter, primarily due to unrealized losses and credit-specific events in the legacy book. The company successfully...