US Stock Market Move | NVIDIA Corporation (NVDA.US) rose over 2%. Goldman Sachs Group, Inc.: AI profits will continue to drive the bull market in US stocks.

On Monday, NVIDIA Corporation (NVDA.US) opened lower but quickly rebounded, rising over 2% to reach $205.57 as of the time of writing. In terms of news, despite recent volatility in tech stocks and momentum assets that has sparked concerns about a potential "AI speculative bubble burst," Ben Snider, Chief Strategist at Goldman Sachs Group, Inc., stated in a newly released report that investors need not panic excessively. Goldman Sachs believes that the current pullback in the U.S. stock market is a typical case of concentration squeeze and consolidation, with exceptionally strong corporate earnings fundamentals remaining the core engine supporting the bull market in U.S. equities. Goldman Sachs' research indicates that as of July 31, over two-thirds (by market capitalization) of companies in the S&P 500 index have reported their second-quarter earnings. Among these, 64% of companies exceeded earnings expectations by at least one standard deviation. Excluding the one-time investment gains of certain tech giants, the overall earnings growth of the S&P 500 index grew by 26% year-on-year (including one-time gains, this figure jumps to 45%); the median company also saw a profit growth rate of 12%, significantly surpassing the expected 9%. Moreover, companies related to AI infrastructure accounted for about one-third of the earnings growth in the S&P 500 index for the second quarter, a proportion expected to rise above 50% in the latter half of 2026 to 2027. Giants such as Alphabet, Amazon.com, Inc., Microsoft Corporation, NVIDIA Corporation, and Broadcom Inc. continue to be major contributors to earnings. Goldman Sachs emphasized that as hedge funds and ETF investors significantly reduced leverage, the risks associated with market deleveraging have markedly eased. Despite the five major tech companies' capital expenditures reaching $182 billion in the second quarter (partly funded through debt and equity financing of $101 billion to cover cash flow gaps), this should not be seen as a warning sign but rather reflects strong market confidence in the potential for AI-related businesses to drive higher revenue growth. The report concludes that while AI trading may still face significant sector rotation and short-term volatility in the future, as long as there is no substantial deterioration in corporate profit growth fundamentals, the U.S. bull market remains firmly supported.