Goldman Sees S&P 500 At 9,000 By 2030—But The Real Boom Lies Elsewhere

Goldman Sachs painted a bullish picture for long-term equity investors, forecasting solid returns for U.S. stocks over the next decade but pointing to far stronger gains brewing overseas.

In a note sent to clients on Wednesday, the investment bank projected the S&P 500 to reach 9,000 by 2030 and 11,100 by 2035—yet sees the biggest gains unfolding in faster-growing emerging markets.

S&P 500: Decent Returns, But Not Exceptional

Goldman’s 10-year base case for the S&P 500 – as tracked by the Vanguard S&P 500 ETF (NYSE:VOO) – is an annualized return of 6.5%, built primarily on 6% annual earnings-per-share (EPS) growth, modest dividends of 1.4%, and a 1% annual valuation drag due to high starting price-to-earnings multiples.

That’s a solid but historically below-average outlook. The 6.5% annualized return ranks in the 27th percentile of the index’s 10-year return distribution since 1900.

When adjusted for inflation, the real return estimate drops to 4% per year, landing in the 33rd percentile of past real outcomes.

Peter Oppenheimer, chief global equity strategist at Goldman Sachs, said earnings growth remains the dominant engine of returns and that U.S. corporations are unlikely to benefit again from the same level of tailwinds that propelled margins higher in past decades.

“We forecast an average annual S&P 500 total return of 6.5% during the next 10 years, with upside and downside scenarios indicating a range of 3% to 10%,” the expert said.

“Extreme current US equity market concentration increases the uncertainty around the long-term equity market forecast,” he added.

Year	Goldman Sachs’ S&P 500 Target
2026	7,600
2027	7,900
2028	8,300
2029	8,600
2030	9,000
2031	9,400
2032	9,800
2033	10,200
2034	10,700
2035	11,100

Emerging Markets And Asia: The Real Boom May Be Here

The most striking part of the report is Goldman’s optimism around emerging markets, where equities are forecasted to return 10.9% annually in local currency and 12.8% in USD over the next decade—nearly double the S&P 500’s expected gains.

The building blocks for this bullish view include 8.7% annual EPS growth, a 2.9% dividend yield, and improving corporate governance and capital efficiency, particularly in markets like India, China, and South Korea.

India is forecast to deliver the strongest earnings growth, with a 12.6% average annual growth over the next decade, driven by structural GDP strength and favorable demographics.

Goldman expects policy-driven shareholder reforms to push dividend payouts and buybacks higher across the region.

The dividend yield in MSCI EM – as tracked by the iShares MSCI Emerging Markets ETF (NYSE:EEM) – is projected to rise from 2.5% today to 3.2% by 2035.

Asia excluding Japan is forecast to deliver 10.3% annual returns, supported by 9% EPS growth and a 2.7% dividend yield, even with moderate valuation compression. Japan, long considered a laggard, is expected to produce 8.2% annual returns, underpinned by 6% EPS growth and improving shareholder returns due to policy shifts.

“We forecast 10.9% annualised local currency total returns over the next 10 years for the MSCI EM index (MXEF), which is highest among the key regions,” Oppenheimer wrote.

Time To Look Beyond US Tech

A key element of Goldman’s forecast is a declining U.S. dollar, which the firm expects to depreciate steadily over the next decade.

Historically, dollar weakness has coincided with outperformance in non-U.S. equities, adding an extra layer of opportunity for globally diversified investors.

Moreover, the investment bank sees the long-term impact of AI as a global force, with benefits extending well beyond U.S. tech giants.

“Diversify beyond the U.S., with a tilt towards Emerging Markets,” Oppenheimer said.

“We expect higher nominal GDP growth and structural reforms to favour EM, while AI’s long-term benefits should be broad-based rather than confined to U.S. Technology,” he added.

Bottom line, Goldman’s message is clear: While the S&P 500 remains a cornerstone of global portfolios, investors seeking higher long-term returns should consider increasing exposure to emerging and Asian markets, where growth, reform and shareholder value creation are expected to accelerate in the years ahead.

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Image created using artificial intelligence via Midjourney.