Ben Snider, Goldman Sachs' chief U.S. equity strategist, said AI investment spending is now driving about half of S&P 500 earnings growth.
Stocks were lower on the day's PPI report and the sharp rise in yields. Snider's view is that the market can keep climbing through higher rates as long as earnings hold up — and on his numbers, they are.
"We estimate that AI investment spending is driving about half of S&P 500 earnings growth."
Snider is Goldman Sachs' chief U.S. equity strategist, and updates the firm's earnings and positioning estimates in real time.
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Here are the 4 calls that matter.
👤 Guest: Ben Snider, chief U.S. equity strategist at Goldman Sachs
🎙️ Host: Scott, a co-anchor of Squawk on the Street on CNBC
📰 Published: 10 September 2026 on CNBC's Squawk on the Street
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ 6 min
Key Takeaways
AI investment spending is already driving about half of S&P 500 earnings growth, on Goldman's own estimate
Higher yields are a negative for valuations, but stocks have handled the last year's rise from near 4% to today's levels just fine The real problem is the speed of the recent move, not the level
Goldman's base case is no Fed hike next week, but it's a close call resting on CPI
With oil-driven inflation fears weighing on energy-sensitive names, Snider is telling clients to diversify into consumer-experience stocks with strong earnings at low valuations Viking is on the firm's conviction list
Only 2% of S&P 500 companies are quantifying AI's earnings benefit on their own calls, even as AI spending shows up more broadly
1. Earnings Over Yields
Snider said direction matters less than the pace of the move. "Higher yields are a negative for valuations. But if you look over the last year, a year ago the ten year Treasury was close to 4%. The S&P 500 was trading around 6600. So clearly stocks can do okay while yields are rising. The real challenge is volatility. And if you look over the last few days, it's the sharp rise in yields that's really making things uncomfortable for equity investors."
On next week's Fed decision, Goldman leans dovish but is not locked in. "Our base case is no hike next week but it will come down to CPI. It's a close call." He said the friendly print the market wants is core CPI at 2.4% year over year, which would be the lowest reading in about five years, and flagged that the morning's PPI report had come in a little hot.
2. Earnings Are Doing the Work
Snider said the market is being driven by earnings, and has been for a while. "This is a market being driven by earnings. That's been the case for a long time. it remains the case. And so is an equity investor. You should be looking for earnings strength."
He put a number on how much of that strength is AI. "Clearest earnings in the market are driven by AI... We estimate that AI investment spending is driving about half of S&P 500 earnings growth."
The market's own pricing reflects the same discipline he described. "I think earnings are the most important thing for equities. At the start of the year, the S&P 500 was trading at a 22 times PE. We're trading at 19 times p today. Our positioning indicator, which combines hedge funds and mutual funds and other investors, is at the lowest level since March. And despite that, the market is still pretty close to a high. And the answer is earnings."
3. Where to Diversify Right Now
With the market focused on oil-driven energy pressure, Snider pointed clients toward consumer names the selloff has left cheap. "We think to reduce volatility it makes sense to diversify a little bit. And one place to look today, especially as the market is very focused on pressures from oil, is look at some consumer stocks... consumer experience stocks that have very strong earnings growth that are trading at pretty low valuations today because the market is so concerned about energy prices." Asked about the 52-week lows piling up in McDonald's, Carnival and Las Vegas Sands, he confirmed that is the space: "That's exactly right. Our equity analysts have Viking on the conviction list goes along with that list."
Asked by the host whether the market can shrug off higher rates as long as earnings hold up, Snider agreed without hedging.
4. The 2% Gap
Snider said broadening AI spending beyond the infrastructure names is a sign the next phase is close. "We've been talking about AI for four years... For most of those four years the story has really been the infrastructure spending. But if you look over the last several months, we've seen an acceleration in broad enterprise spending on AI. And what that signals to me is we are getting closer to starting to see earnings gains and productivity gains in other companies." His evidence: "We just looked across all of the earnings calls for the S&P 500 companies, and you're starting to see some companies really highlight the earnings accretion that is coming from using AI in their businesses."
But almost none of them are putting a number on it yet. Only 2% of companies are quantifying the AI benefit in earnings calls today, and he expects that to move meaningfully "in the next several quarters," visible first in corporate disclosures and then in productivity data.
He said midterm politics are unusually absent from client conversations this cycle, even with prediction markets pointing toward a likely Democratic House. "The likelihood of a major legislative change over the next couple of years looks pretty limited... It might create a little bit of tactical volatility. But over the medium-term it's all about earnings."
Bonus Insights
Snider said the calendar itself is a headwind in September — quarter-end, options expiration and blackout windows all land in the same stretch — but said the strong earnings backdrop and improving seasonal technicals into year-end keep him constructive over the medium term despite the difficult day-to-day.
Snider's bottom line is that earnings, not yields, decide whether this market holds up — and AI spending is already responsible for roughly half of that earnings growth, even before most companies have started disclosing it themselves.
Products, Companies & Tools Mentioned
Goldman Sachs (Snider's employer)
Viking Holdings (On Goldman's conviction list as part of the consumer-experience diversification trade)
McDonald's, Carnival and Las Vegas Sands (Named as stocks at 52-week lows that fall in the consumer space Snider flagged)
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