Goldman Sachs Warns An AI Slowdown Can Tank The Stock Market By 20%

Group 1 - Artificial intelligence has driven the stock market to record highs, but Goldman Sachs warns of a potential 20% decline if AI spending slows down [1] - A reversion of long-term growth estimates to early 2023 levels could imply a 15% to 20% downside to the current valuation multiple of the S&P 500 [2] - Some analysts predict a sharp deceleration in AI spending starting in Q4 2025 and into 2026 [3] Group 2 - Meta Platforms plans to invest $600 billion in AI over the next three years, with indications that this amount could be exceeded [4] - Microsoft secured a five-year, $17.4 billion AI infrastructure deal, suggesting continued AI growth beyond the current market rally [5] - AI significantly influences stock market performance, with Nvidia representing approximately 7% of the S&P 500 [6] Group 3 - The top eight publicly traded corporations in the S&P 500 are heavily investing in AI, collectively accounting for over 36% of the index [7] - Notable companies outside the top 10 of the S&P 500, such as Oracle, Palantir, and Cisco, are also making substantial investments in AI [7]