Corporate earnings are growing much faster than the economy. What Goldman strategists say about bubble concerns.

Goldman Sachs strategists, led by Ben Snider, addressed the gap between corporate profit growth and broader economic expansion in a recent note. The team projects S&P 500 earnings per share growth will slow to 11% in 2027 and 2028, a deceleration from the faster pace that has fueled questions about whether equity valuations have run ahead of fundamentals.

The distinction matters because earnings growth that outpaces GDP is not automatically a sign of a bubble. Large index constituents can expand profits through margin gains, share buybacks, or overseas revenue that domestic output figures do not capture. Still, when profit growth depends on a narrow group of companies, the index becomes more sensitive to disappointments in those names.

The key figure to watch is whether realized earnings track the strategists' projected slowdown. A gradual glide toward 11% would suggest normalization; a sharper drop could challenge the earnings assumptions embedded in current valuations. For observers, the debate is less about labeling a bubble than about how durable profit growth proves to be.