Goldman Sachs: S&P 500 expected to surge to 8,000 points, with stock demand set to continue outstripping supply.

Goldman Sachs partner and Head of US Equity Execution Services John Flood said that while US equity issuance is projected to hit an all-time high in 2026, demand for stocks will continue to outpace supply, with the S&P 500 index poised to rise further to 8,000 points. The S&P 500 closed at an all-time high of 7,757 points last Friday, marking its 26th record high so far this year. Goldman Sachs projects total US equity issuance will reach around $700 billion in 2026, with IPOs accounting for just over $225 billion and other issuances making up roughly $450 billion. Despite the record total size, this amounts to only about 1% of the Russell 3000 index’s market capitalization, roughly in line with the historical average from 2015 to 2019. The current issuance level is closer to market normalization rather than an overheated boom. Meanwhile, stock buybacks remain a key pillar supporting market demand. US companies have already authorized $989 billion in buybacks so far this year, an all-time high; Goldman Sachs forecasts full-year 2026 open-market stock repurchases will hit $1.4 trillion, significantly exceeding the roughly $700 billion in primary market issuances. Even when accounting for potential additional supply from post-IPO lock-up expirations, demand will still outpace supply. The current growth in equity issuance is primarily driven by AI investment demand, with AI-related issuances accounting for about 40% of US follow-on offerings. As mega-cap tech firms are projected to spend over $1 trillion annually on capital expenditures in the coming years, other companies may also turn to financing to support their AI investment plans. However, Goldman Sachs expects that external financing for mega-cap tech companies will remain dominated by debt, with equity financing serving a supplementary role.