Key Takeaways
- A Goldman Sachs analysis indicates Nvidia and Micron may collectively contribute approximately 33% of total S&P 500 earnings expansion in 2026.
- Companies benefiting from AI infrastructure investments are projected to fuel close to 50% of S&P 500 EPS expansion through 2026 and 2027.
- Nvidia’s growth stems from sustained demand for AI accelerators, while Micron benefits from memory chip needs in expanding AI models and data infrastructure.
- The investment bank cautioned that increasing depreciation expenses from massive hyperscaler capital expenditures may temper earnings growth, especially by 2027.
- Analyst consensus suggests NVDA has 45.4% upside potential with a $306.46 target, whereas MU projections indicate 21.6% downside risk.
Goldman Sachs has identified two semiconductor powerhouses as pivotal players in the S&P 500’s earnings trajectory for 2026, and the projections are striking.
According to a Goldman Sachs analysis published on May 27, Nvidia and Micron are poised to deliver approximately one-third of the complete S&P 500’s earnings expansion this year.
This represents a remarkable consolidation of profit generation within just two corporate entities.
Goldman’s comprehensive outlook suggests that companies benefiting from AI infrastructure investments will collectively drive roughly half of S&P 500 EPS growth throughout 2026 and 2027. This category encompasses not only semiconductor manufacturers but also technology hardware providers, industrial companies, and utility firms capitalizing on data center expansion.
NVDA stock declined 1.14% during the trading session, whereas MU advanced 1.25%.
Nvidia’s contribution to this narrative is clear-cut. The appetite for AI accelerators — the specialized GPUs that enable model training and inference operations — has remained robust. The company has established itself as the primary choice for organizations developing AI infrastructure capabilities.
Micron’s strategic position receives less attention but carries equivalent significance. As artificial intelligence models expand in scale and data center operations intensify, the demand for high-bandwidth memory solutions escalates proportionally. This represents Micron’s core opportunity.
Goldman’s analysis highlights that the impact extends well beyond the semiconductor sector. Energy providers and industrial corporations connected to data center development are also capturing earnings benefits as the infrastructure expansion wave progresses through the economy.
Potential Headwinds Identified by Goldman
The outlook isn’t without complications. Goldman explicitly cautioned that hyperscalers — major cloud computing platforms — are committing substantial capital to AI infrastructure development, and these expenditures carry long-term consequences. Depreciation expenses from these investments will begin impacting earnings, with particular pressure expected approaching 2027.
This represents a legitimate concern. Significant capital investment today generates an accounting burden in subsequent periods, which may diminish portions of the earnings growth Goldman anticipates.
Insider trading patterns at Nvidia merit attention as well. Throughout the previous three months, company insiders divested $163.7 million in shares with zero purchase activity recorded. While this doesn’t automatically signal concern, it constitutes relevant information for investors to consider.
Analyst Sentiment and Targets
Regarding Wall Street’s preference between these stocks, the divergence is substantial.
NVDA holds an average analyst price target of $306.46, suggesting 45.4% appreciation potential from present valuations. Micron’s consensus forecast, conversely, indicates 21.6% potential decline.
Nvidia’s GF Score registers at 96 out of 100, featuring maximum 10/10 marks in both profitability and growth metrics. Its current P/E ratio stands at 32.17x, representing a valuation premium investors have accepted given the company’s earnings momentum.
While Goldman Sachs’ AI infrastructure investment thesis encompasses numerous companies, Nvidia and Micron represent its most direct manifestation within the semiconductor industry.
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