Investing.com -- Goldman Sachs has pushed back on fears that U.S. corporate profits are in an "earnings bubble," even as it acknowledged some companies are "over-earning."

Analyst Ben Snider noted that S&P 500 earnings per share grew 51% in the second quarter and 26% over the past four quarters, lifting profits well above their long-term trend.

He added that while the index's forward price-to-earnings multiple of 19 is in line with its 10-year average, its multiple on trend earnings has been exceeded in recent decades only at the peak of the dot-com bubble.

Still, Snider said, "our base case is for S&P 500 earnings growth to decelerate, not collapse, in coming years," forecasting EPS growth of 11% in both 2027 and 2028, to $415 and $460, respectively.

The biggest long-term question is AI, he said. The investment boom has driven nearly half of this year's earnings growth, a tailwind that should fade in 2028 as capital spending slows and depreciation mounts, turning into a marginal drag.

Snider also flagged risks from a potential fall in semiconductor prices, where an adverse scenario could cut S&P 500 earnings by about 10%, and from mega-cap technology firms' equity investment gains, which lifted second-quarter earnings by 12% but should diminish in 2027.

“Our 12-month S&P 500 return forecast of +14% (to 8,700) reflects the view that earnings growth, rather than expanding valuations, will remain the primary driver of the bull market,” concluded the analyst.