Goldman Sachs sees $600B U.S. equity issuance in 2027

U.S. companies are poised to raise another $600 billion through stock offerings in 2027, extending a surge in equity issuance fueled partly by artificial intelligence investment, according to Goldman Sachs. Although the growing supply of shares could pressure stock valuations, the investment bank expects corporate buybacks and investor demand to help sustain the bull market.

In an Oct. 9 research report, Goldman Sachs strategist Ben Snider projected that U.S. companies will raise $175 billion through initial public offerings next year, with another $425 billion coming from follow-on offerings, convertible securities and special purpose acquisition companies.

The forecast follows an extraordinary year for capital raising. U.S. companies have issued approximately $431 billion in equity so far in 2026, an increase of 98% from a year earlier. Goldman expects full-year issuance to reach $675 billion, exceeding the previous record of $540 billion set in 2021.

For investors, the implications are mixed. A wave of new shares could absorb capital that might otherwise support existing stocks, particularly as lockup restrictions expire on shares issued in recent IPOs. However, Goldman expects continued earnings growth, lower interest rates and aggressive corporate repurchases to provide substantial support for equity prices.

Stock supply could reach highest since 2000

Goldman estimates that approximately $1.7 trillion worth of shares could become eligible for sale in 2027 as restrictions on recently issued stock expire.Combined with new offerings, that could produce the largest increase in net publicly available U.S. equity supply since 2000, even after accounting for corporate buybacks and cash-financed acquisitions.

The actual effect may be considerably smaller because shareholders are not necessarily expected to sell their newly unlocked positions. Proceeds from any sales also could be reinvested in the stock market.

Goldman forecasts that companies will repurchase approximately $1.7 trillion of their shares in 2027, compared with $1.5 trillion this year. Including cash acquisitions, corporate demand for equities is expected to exceed $2 trillion.Share repurchase activity has already accelerated. S&P 500 (SP500) companies increased gross buybacks by 15% during the first half of 2026, while announced repurchase authorizations reached approximately $1.14 trillion through Oct. 5, up 23% from the comparable period last year.

AI investment fuels offerings

Artificial intelligence infrastructure spending has become an important driver of equity issuance, although Goldman expects debt financing and operating cash flow to remain the primary funding sources for the largest technology companies.

AI-related follow-on offerings have raised approximately $65 billion this year, representing 45% of total U.S. follow-on issuance.

Goldman projects that major cloud computing companies, including Amazon (AMZN), Alphabet (GOOG)(GOOGL), Meta Platforms (META), Microsoft (MSFT) and Oracle (ORCL), will spend approximately $1.2 trillion on capital expenditures in 2027 while generating $1.1 trillion in operating cash flow.

The bank's credit strategists estimate that debt financing will cover approximately 35% of that spending, equivalent to more than $400 billion.Those figures suggest that the largest technology companies may have limited need to issue additional shares. However, smaller businesses involved in building AI infrastructure could continue turning to equity markets to finance expansion and protect their balance sheets.

Rising Treasury yields threaten IPO recovery

The outlook for new stock offerings depends partly on interest rates, which have risen sharply in recent months.

The benchmark 10-year Treasury yield has increased approximately 125 basis points over the past year, including more than 50 basis points since late August, according to Goldman.

Higher borrowing costs have contributed to a slowdown in equity issuance. Companies raised $93 billion during the third quarter, down from a record $252 billion in the second quarter.

The number of offerings also declined. September recorded just 19 follow-on offerings and five IPOs, the lowest monthly totals in those categories since the tariff-related market disruption in April 2025.

Goldman expects the 10-year Treasury yield (US10Y) to decline from approximately 5.2% to 4.4% by the end of 2027, creating more favorable conditions for companies seeking to raise capital.

Goldman Sachs maintains bullish S&P 500 outlook

Despite the potential increase in share supply, Goldman remains optimistic about the broader stock market.

The bank forecasts that S&P 500 earnings per share will rise 11% in 2027 to $415, following an estimated 36% increase to $375 this year. Goldman's 12-month S&P 500 target of 8,700 implies approximately 12% upside from the index's Oct. 8 level of 7,765.

Investor demand also remains substantial. Federal Reserve data cited by Goldman show that U.S. households purchased more than $800 billion in equities during the first half of 2026, while foreign investors added more than $350 billion.

Still, the bank highlighted signs of vulnerability beneath the market's gains. Although the S&P 500 was trading within 1% of its record high, the median constituent was 16% below its own peak, reflecting unusually narrow market leadership.

That concentration, combined with rising interest rates and expanding equity supply, could limit further increases in valuation multiples.

Nevertheless, Goldman expects stronger corporate profits and sustained demand from households and international investors to outweigh the pressure from new share issuance, allowing the bull market to continue into 2027.