Key Takeaways
- A new Goldman Sachs analysis indicates Nvidia and Micron may collectively contribute approximately one-third of total S&P 500 earnings expansion in 2026.
- Companies benefiting from AI infrastructure investments are projected to power close to half of S&P 500 earnings per share growth through 2026 and 2027.
- Nvidia’s growth stems from sustained demand for AI acceleration chips, while Micron capitalizes on memory requirements driven by expanding AI models and data center operations.
- Goldman analysts highlighted increasing depreciation expenses from substantial hyperscaler capital investments as a potential headwind to earnings growth, especially in 2027.
- Analyst consensus suggests 45.4% upside potential for NVDA with a price target of $306.46, whereas MU faces a projected 21.6% decline from current levels.
A recent Goldman Sachs analysis has positioned two semiconductor powerhouses as the primary drivers behind S&P 500 earnings momentum heading into 2026, and the projections demand attention.
According to Goldman Sachs research published May 27, Nvidia and Micron are forecast to deliver approximately one-third of the total earnings growth across the entire S&P 500 index this year.
This represents an extraordinary concentration of profit generation within just two corporate entities.
The investment bank’s comprehensive analysis reveals that companies benefiting from AI infrastructure expansion will collectively represent approximately half of S&P 500 earnings per share growth throughout 2026 and 2027. This category encompasses more than semiconductor manufacturers—it includes technology hardware providers, industrial companies, and utility operators supporting the massive data center expansion.
In recent trading activity, NVDA stock declined 1.14%, while MU advanced 1.25%.
Nvidia’s contribution to this earnings narrative is crystal clear. Insatiable appetite for AI accelerators—the graphics processing units essential for training and running AI models—continues unabated. The company has established itself as the dominant supplier for organizations scaling AI infrastructure.
Micron’s strategic position receives less attention but carries equal significance. As artificial intelligence models expand in scale and data center operations intensify, demand for high-bandwidth memory escalates proportionally. This is precisely where Micron excels.
Goldman’s research emphasizes that these effects extend far beyond the semiconductor sector. Energy providers and industrial enterprises connected to data center development are capturing earnings gains as the infrastructure expansion ripples through the broader economy.
Potential Headwinds Identified by Goldman
The outlook isn’t entirely positive. Goldman explicitly cautioned that hyperscalers—major cloud computing platforms—are deploying massive capital toward AI infrastructure, and these expenditures create lasting consequences. Depreciation expenses tied to this spending will begin pressuring earnings, with particular impact expected in 2027.
This represents a legitimate concern. Substantial capital expenditure in the present creates accounting burdens in the future, which may erode some of the earnings growth Goldman forecasts.
Insider trading patterns at Nvidia merit consideration as well. Throughout the previous three months, company insiders divested $163.7 million in shares with zero reported purchases. While not necessarily alarming in isolation, this activity provides useful context.
Analyst Sentiment and Price Targets
Regarding Wall Street’s preference between the two stocks, the contrast is substantial.
NVDA holds a consensus Wall Street price target of $306.46, suggesting 45.4% appreciation potential from present levels. Micron’s consensus forecast, conversely, indicates 21.6% downside risk.
Nvidia’s GF Score stands at 96 out of 100, featuring maximum 10/10 scores in both profitability and growth categories. Its current P/E ratio of 32.17x reflects the premium valuation investors have accepted given the company’s earnings momentum.
While Goldman Sachs’ AI infrastructure investment thesis encompasses numerous companies across multiple sectors, Nvidia and Micron represent the most direct semiconductor plays on this transformative trend.
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