# Goldman Strategist Tony Pasquariello Sees Final S&P 500 Advance Before 2027 Supply Surge

By Enna Lee

Canonical URL: https://www.tokenpost.com/news/investing/53375
Published: 2026-11-10T22:46:34.000Z
Updated: 2026-11-10T22:46:34.000Z
Section: Investing

> Goldman strategist Tony Pasquariello expects weaker returns and higher baseline volatility in 2027 as earnings growth, investor flows and AI momentum fade, with IPOs and corporate capital spending adding to net share …

Tony Pasquariello, Goldman Sachs’ global head of hedge fund business, expects the S&P 500 to make one more advance before U.S. equities face their largest net-supply increase since 2000. He sees returns weakening and the baseline for volatility rising in 2027 as earnings growth, investor flows and the AI trade — forces behind the market’s strong four-year run — lose momentum. Pasquariello has emphasized that markets are sensitive to shifts in growth momentum.

The supply outlook combines a pipeline of large initial public offerings, including SpaceX and Anthropic, with companies using cash for capital spending instead of share buybacks. The IPO pipeline would add new shares to the market, while directing cash to capital spending leaves less for repurchases. Pasquariello said buybacks had recovered to about $5 billion a day and that he was relatively optimistic about flows during the year’s final eight weeks.

Pasquariello cited S&P 500 earnings growth of 33% in the second quarter and a projection of 35% in the third quarter, the fastest pace in 30 years outside post-recession recoveries. Goldman Sachs projects earnings per share growth of about 18% next year. Pasquariello described that estimate as highly sensitive to AI capital spending and sees a slowdown in earnings growth as likely.

Market consensus puts technology companies’ capital-spending growth at 96% this year and 44% next year. Hyperscale cloud companies posted combined negative free cash flow of $31 billion in the third quarter.

Hedge funds sold global AI stocks at their fastest pace in more than five years over a 20-trading-session period. The rate was more than three standard deviations above average.

Another Goldman strategist, Rich Privorotsky, sees the market pullback as more like a 1998 liquidity event than a 2000-style end to the cycle. He has also acknowledged a similarity to 2000 in the scale of technology spending and uncertainty about its returns.