The S&P 500 could witness a further 15% surge by the end of 2024, driven by the ongoing exceptional performance of mega-cap tech stocks, according to a recent note from Goldman Sachs.
What Happened: The bank’s chief equity strategist, David Kostin, suggested that the S&P 500 could reach as high as 6,000, reported Business Insider. This optimistic scenario is attributed to the fact that tech stocks are not currently in a bubble, with investors focusing more on profitable growth than speculative companies yet to profit.
Kostin noted that the current long-term growth expectations for the S&P 500 are at 11%, slightly above the 9% average, but still below the 13% peak seen during the 2021 stock market frenzy and the 16% peak seen during the dot-com bubble in 2000.
Goldman Sachs also pointed out that the concentration in mega-cap tech stocks makes sense as these companies are growing much faster than the rest of the stock market. The annualized sales growth for the top seven tech stocks is expected to be 12% from 2023 through 2025, which is four times the 3% growth rate expected for the ...