[Goldman Sachs: Expects S&P 500 to Rise 14% to 8700 Over the Next Year, Recommends Overweighting US and Japanese Stocks] BlockBeats reported on November 13th, citing Bloomberg, that Goldman Sachs strategists expect the S&P 500 to rise approximately 14% to 8700 over the next 12 months. The team led by Peter Oppenheimer recommends overweighting US and Japanese stocks and underweighting European stocks in 2027. The S&P 500 has risen 11% year-to-date. A key reason for Goldman Sachs' bullish view on US stocks is that after the sell-off in large-cap tech stocks, the valuations of hyperscale cloud service providers are significantly lower than historical levels. The Nasdaq 100 has fallen about 9% from its early October high, with market concerns about AI infrastructure investment and the Nvidia management turmoil putting pressure on tech stocks. Goldman Sachs believes the technology sector, particularly large cloud service providers, remains relatively defensive: although leading companies have turned negative in cash flow, their balance sheet metrics, such as the net debt-to-equity ratio, remain generally healthy. Goldman Sachs expects S&P 500 earnings per share growth to slow from 36% in 2026 to 11% in 2027, while the corresponding growth rate for the Stoxx Europe 600 index will decrease from 18% to 7%. The bank believes that companies capable of maintaining rapid growth over the long term are likely to receive higher valuation premiums as earnings growth slows. The team also favors sectors that typically benefit from declining bond yields, easing inflation, and lower oil prices. In Europe, despite the Stoxx Europe 600 index hitting new highs this week, driven by earnings reports and capital outflows from the AI sector, Goldman Sachs still recommends an underweight position. The bank believes that European stock valuations have fallen less than in other regions, and government debt issues and a busy political schedule pose additional risks. [Original Link]