[Goldman Sachs Warns: US Stock Market's Three Engines Stall, 2027 May See Largest Stock Supply Shock in 26 Years] According to Jinse Finance, on November 9th, Tony Pasquariello, Global Head of Hedge Funds at Goldman Sachs, warned that the three main drivers supporting the US stock market's rise over the past four years—earnings growth, capital flows, and the AI narrative—are all showing signs of deterioration. While the S&P 500 is still expected to complete its final rally by the end of the year, the market may face the largest net stock supply shock since the bursting of the dot-com bubble in 2000 in 2027, and index volatility may also trend upward. Pasquariello pointed out that S&P 500 earnings growth reached 33% in the second quarter and is projected to be 35% in the third quarter, but growth momentum may have peaked. Goldman Sachs expects S&P 500 earnings per share (EPS) to still grow by about 18% in 2027, but changes in AI capital expenditure could pose significant downside risks. The funding environment is also under pressure. Data from Goldman Sachs' prime brokerage firm shows that hedge funds have sold off global AI stocks at the fastest pace in over five years in the past 20 trading days, deviating from the historical average by more than three standard deviations. Weaker corporate buybacks, reduced buying from overseas investors, and selling by CTA strategies have further weakened market absorption capacity. Goldman Sachs predicts that the IPOs of large companies like SpaceX and Anthropic, along with tech giants allocating more cash flow to AI infrastructure construction rather than stock buybacks, will jointly drive the net supply of US stocks to its highest level since 2000 in 2027. The AI narrative is also beginning to diverge. The market expects the growth rate of tech giants' capital expenditures to slow from 96% this year to 44% next year, with hyperscale cloud vendors experiencing a net free cash flow depletion of $31 billion in the third quarter. Goldman Sachs believes the market is shifting from primarily pricing in the growth potential from AI investments to simultaneously assessing the sustainability of capital expenditures and the uncertainty of investment returns. In terms of valuation, the Nasdaq 100's forward price-to-earnings ratio has fallen to 18.4 times, the lowest level since 2020. However, Pasquariello, citing two veteran investors, stated that the current stock market appears overly optimistic compared to the credit market, and the pressure on AI-related high-yield bonds may indicate that the credit market is the first to reflect financing risks. Goldman Sachs strategist Rich Privorotsky believes that this correction is more similar to the liquidity crisis of 1998 than the bursting of the dot-com bubble in 2000, but also acknowledges the unsettling similarities between the current scale and uncertainty of AI investment and 2000.