Goldman Sachs released a bullish forecast on December 19, 2025, predicting global stock prices will rise about 13% in 2026, with total returns reaching roughly 15% after dividends. The investment bank underscores that sustained earnings growth, a resilient global economy, and expectations of modest Federal Reserve easing are driving this positive stance. Importantly, the firm stresses that the upcoming rally will broaden beyond the historically dominant U.S. technology sector.

Bullish Market Theme: Beyond U.S. Technology

In its latest global equity strategy, Goldman Sachs, led by strategist Peter Oppenheimer, expects 2026 returns will be slightly lower than 2025 but still robust. Price appreciation will mainly come from earnings growth rather than expansion in valuations. For the first time since the early 2010s, U.S. equities have lagged returns seen in Europe, China, and broader Asian markets measured in U.S. dollars.

This regional shift coincides with a rebalancing across styles and sectors. While U.S. markets continue to see Growth stocks leading, European markets have shown considerable strength in Value stocks. Goldman Sachs notes a meaningful decline in correlations both within and across sectors, which enhances opportunities to generate alpha. Rising dispersion signals investors are discerning individual winners and losers, rather than treating markets monolithically.

Emphasis on Diversification and AI-Driven Opportunities

Goldman Sachs advises diversifying equity holdings by geography, sector, and style to maximize gains amid a broadening bull market. Allocations should increase toward emerging markets, while balancing selective Growth and Value stocks globally. The strategists particularly highlight the expanding role of companies leveraging artificial intelligence outside traditional technology hyperscalers.

They anticipate investors will target firms deploying AI to improve margins and productivity across various industries. This reflects ongoing technology capital expenditure cycles and potential spillover benefits beyond core tech. With global stock concentration diminishing, focusing on alpha via diversified and thematic investments becomes increasingly important.

Analyst Scenarios

Goldman’s baseline scenario assumes continued economic expansion without a recession, supported by the Federal Reserve’s modest easing approach. Under these conditions, the firm considers a major equity downturn unlikely despite elevated valuations. The strategists emphasize that a significant market correction would typically require a recessionary environment.

Bullish: Market Outlook for 2026

Goldman Sachs projects approximately 13% price returns next year across global equities, pushing total returns near 15% once dividends are included. This forecast rests on steady earnings growth, healthy economic momentum, and a cautiously accommodative Federal Reserve stance. Investors should shift focus from U.S. tech-heavy portfolios to broader global equities, including Europe and emerging Asian markets, while embracing diversification across sectors and styles.

The firm highlights the increasing relevance of AI beneficiaries beyond major tech firms and encourages exploring these opportunities as part of a comprehensive strategy. The decline in stock correlations and wider dispersion presents fertile ground for differentiated returns. This bullish outlook signals a more diversified and durable equity rally in 2026, encouraging investors to recalibrate portfolios accordingly.