Ben Snider-led Goldman Sachs lifts software earnings forecasts, prompting scrutiny of analysts

Ben Snider and his Goldman Sachs equity research team reported that two-year forward earnings estimates for software companies climbed 5% over the past three months, a tactical finding the bank circulated to clients and that Bloomberg and other outlets highlighted after Feb. 16, 2026. The note frames the move as a measurable pushback against recent market anxiety about artificial intelligence disruption.

The Goldman report lands against clear market dislocation. Finance Yahoo and GuruFocus cited a UBS basket of US stocks deemed at risk from AI that has fallen 50% over the past year, even as Goldman’s analysts recorded upward revisions to 2026 earnings-per-share and double-digit profit growth in the fourth quarter for many of the same industries.

Ben Snider summarized the juxtaposition in Goldman’s note: “Although investors have been deeply concerned about the disruptive impact of artificial intelligence in recent weeks, software stocks at the center of these worries have generally delivered financial reports that exceeded market expectations, prompting analysts to raise their future earnings forecasts.” That pattern, Goldman says, explains why sell-side forecasts moved up rather than down despite investor rotation away from perceived AI-exposed names.

Goldman’s team also quantified the infrastructure backdrop. The bank’s analysts expect capital expenditure by hyperscalers in 2026 to be 22% above estimates at the start of this earnings season, and the report notes that investment intensity “exceeds that seen in the late 1990s.” Finance Yahoo reproduced Goldman’s line that the capital cycle behind AI infrastructure shows little sign of slowing, an argument for concentrated spending momentum even as some equity prices decline.

Valuation and growth dynamics received separate treatment in excerpts republished by AOL and Bank of America. The forward P/E multiple for software fell from 35x in late 2025 to 20x currently, the note shows, the lowest absolute level since 2014 and the smallest premium to the average S&P 500 stock since 2010. At 20 times forward earnings, the software sector maps more to companies growing 5% to 10% annually, the analysis says, versus a September 2025 P/E of 36 that implied 15% to 20% growth.

Goldman’s senior U.S. software analyst Kash Rangan set out practical monetization paths for generative AI. Rangan writes, “Generative AI can streamline business workflows, automate routine tasks and give rise to a new generation of business applications.” Goldman Sachs Research lists three explicit ways software firms can monetize generative AI: through new production and application releases; by charging premiums for AI-integrated offerings; and by increasing prices over time as existing products are supplemented with AI-enabled features and prove their value to customers. Goldman also estimates the total addressable market for generative AI software at $150 billion versus $685 billion for the global software industry.

The note flags concentration of momentum: Goldman found earnings-per-share revisions have been strongest among mega-cap technology stocks, reinforcing that capital and estimate momentum remain concentrated in the companies building and enabling AI systems. AOL’s repackaging of Bank of America commentary provided company-level color, quoting BofA on MongoDB, “We think MongoDB's JSON document database is special…and it's setting the business up nicely as a long-term share gainer of new AI workloads and as enterprises modernize legacy ones,” on Datadog, “What is being missed is that observability is mission critical. Even OpenAI...spent well over a hundred million with Datadog before even thinking about moving some of that work in-house,” and on JFrog, “Despite adjacent vendors...we think JFrog is the leader and is at low risk of being displaced any time soon.”

Market-watchers have scrutinized Goldman’s message. Finance Yahoo/GuruFocus reproduced a site warning that “GuruFocus has detected 8 Warning Signs with GS,” and AOL framed the shift as Wall Street moving to a “show me the money” mindset. Goldman itself cautioned that investors continue to debate the potential for longer-term earnings disruption from AI, explicitly noting that the current strength in analyst revisions “does not necessarily settle the structural question.”