Goldman Sachs analysts said S&P 500 companies reported robust revenue expansion in the first quarter, with real revenues excluding energy rising 6.3% year-over-year. The firm's review covered almost the entire index, allowing it to present a broad view of corporate top-line performance during the period.
Despite geopolitical tensions stemming from the Iran war and the accompanying rise in oil prices, companies provided only limited evidence of a widespread pullback in customer spending. Management teams did, however, voice apprehension about the near-term outlook.
Goldman Sachs highlighted a subdued consumer-spending outlook into the second half of 2026. The bank projects real consumer spending growth of just 1.3% over that period, pointing to a low personal saving rate and a 1.1% year-over-year decline in real disposable income reported in April as key constraints.
The conflict put upward pressure on input costs and weighed on corporate margins. Goldman Sachs' price announcement tracker - a measure that captures both prices paid by companies and prices they receive from customers - climbed to its highest reading since late 2023. Company managements most frequently flagged higher oil prices as a driver of cost increases, along with rising shipping costs and more expensive resin-based materials and computer memory.
Investment in artificial intelligence is sustaining capital expenditure growth, the analysis found. Hyperscaler firms raised their 2026 spending plans by 12% during the earnings season, bringing aggregate plans to more than $750 billion, which equates to an 83% increase versus 2025.
Goldman Sachs anticipates business fixed investment to expand nearly 8% this year. The bank quantifies a roughly 3 percentage point contribution from AI-related spending and another 3 percentage point boost tied to tax incentives included in last year’s fiscal package.
So far, the labor market shows only limited effects from AI, according to Goldman Sachs. A small share of management teams mentioned AI in the context of layoffs or hiring freezes. Within the technology sector and among startups, some companies have increasingly linked recent workforce reductions to advances in agentic models. Those cuts most often affected operations, data labeling, software development, and customer support roles.
At the same time, online job posting data from LinkUp indicate these same organizations have increased hiring demand for roles tied to building and supporting AI systems - specifically computer hardware, systems engineering, and research positions.
Overall, Goldman Sachs' earnings-season analysis presents a picture of resilient revenue growth across the S&P 500 as companies navigate higher input costs and invest heavily in AI-driven capacity. The balance between persistent demand and margin pressure will be central to corporate performance in the quarters ahead.