Systematic funds buy stocks at record pace, adding $86 billion: Goldman

investing.com -- Systematic hedge funds have snapped up equities at unprecedented speed over the past week, adding $86 billion in exposure, according to a note from Goldman Sachs published late Thursday.

Goldman said these algorithm-driven funds, often called CTAs, bought stocks at a pace that ranks among “the largest in history” over the last five trading sessions.

The bank noted that since markets turned higher at the start of April, hedge funds, especially those that trade systematically, have been buyers, positioning for further gains in global equities.

The surge comes as stocks hover near record highs and head for their third consecutive week of gains, with investors watching for developments that could bring a near-term resolution to the Middle East conflict.

Goldman highlighted that the rate at which CTAs have accumulated equities over the past week sits in the top five buying speeds of all time.

The bank’s models estimate that these trend-following speculators could continue to buy stocks and potentially add another $70 billion of exposure over the next five sessions.

The buying intensity is said to mirror previous episodes of aggressive CTA accumulation seen in August 2024, November 2023 and September 2019, according to Goldman.

Investing.com -- Goldman Sachs said in a note Monday that it expects the U.S. equity market to continue climbing, with analyst Ben Snider setting a year-end S&P 500 target of 7,600, implying roughly 7% upside.

The forecast embeds 12% earnings per share growth in 2026 and 10% in 2027, with the index's price-to-earnings multiple held near its current level of 21 times.

"The US equity market should continue to make new highs in coming months on the back of continued earnings growth," Snider wrote.

Goldman Sachs noted that the S&P 500 has rallied 12% since March 30, its sharpest rise since April 2020, consistent with historical recoveries and an improving geopolitical outlook.

Investor sentiment has rebounded to pre-war levels, though positioning remains below prior peaks, the bank noted.

On earnings, Goldman Sachs said consensus EPS estimates for 2026 and 2027 have risen 4% since late January, underpinned by AI investment spending.

The bank estimates AI will drive roughly 40% of S&P 500 EPS growth this year, with hyperscaler capital expenditure guidance expected to be a key focus during the current earnings season.

Within equities, Goldman Sachs recommends tilting toward secular growth companies with idiosyncratic earnings tailwinds and limited AI disruption risk, specifically highlighting firms tied to power infrastructure investment.

The bank flagged narrow market breadth as a key risk, noting it has dropped to one of the narrowest levels since the Dot Com bubble.

Goldman Sachs believes "the beneficiaries of AI investment spending remain the clearest opportunity in the AI complex."

Investing.com -- JPMorgan has raised its year-end S&P 500 price target to 7,600 on expectations of stronger earnings, pointing to renewed momentum in the AI theme and de-escalating geopolitical risks.

The bank lifted its 2026 S&P 500 EPS estimate to $330, representing 22% year-on-year growth, from a prior forecast of $315, and raised its 2027 estimate to $385 from $355. Both figures sit above the Wall Street consensus.

The new price target of 7,600 is up from a prior target of 7,200, which had been set last month amid elevated geopolitical risks in the Middle East.

JPMorgan kept its forward multiple unchanged at 22x, meaning the entire upgrade was driven by higher earnings rather than any expansion in valuation. Strategists led by Dubravko Lakos-Bujas said that should geopolitical tensions move toward a swift resolution, the multiple could re-expand toward 23x, which "would imply an S&P 500 level of ~8,000."