Reduced hiring bodes well for gradual AI labor market transition, says Goldman's Ben Snider

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Goldman Sachs 9.0
Investment Bank $2500.00B
Ben Snider 9.0

Reduced hiring bodes well for gradual AI labor market transition, says Goldman's Ben Snider

ndx

Consensus estimates for this quarter's earnings growth are low and we expect to clear that bar; the market can keep climbing from here. Strong earnings growth, cautious positioning, and Fed easing expectations support a short-term upward direction for the Nasdaq 100.

10/24/2025 3:35:41 PM	medium term cautious up	21 days later	-3.96%	-1.98%
10/21/2025 3:09:27 PM	long term up	61 days later	+2.34%	+2.34%
10/15/2025 9:58:39 AM	short term cautious down	5 days later	+1.91%	-0.95%
10/4/2025 1:00:28 AM	medium term up	21 days later	+3.37%	+3.37%
9/12/2025 11:13:00 PM	medium term up	21 days later	+2.82%	+2.82%
9/11/2025 4:14:18 PM	short term up	5 days later	+0.55%	+0.55%
9/9/2025 5:53:04 PM	medium term up	20 days later	+3.48%	+3.48%
9/1/2025 4:18:49 PM	medium term up	20 days later	+6.59%	+6.59%
8/6/2025 7:05:41 PM	medium term cautious down	20 days later	+0.75%	-0.38%
8/5/2025 6:04:18 PM	medium term up	20 days later	+0.90%	+0.90%

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Joining me now at Post 9, Ben Snyder, Goldman Sachs's Senior U.S. Portfolio Strategist. Nice to have you. We're in a pretty good position heading into this week, aren't we?

host
Ben Snider

Yeah, it looks pretty good. I think it's really important to notice amid all the talk of AI and all the talk of macroeconomic volatility how strong earnings have been this year. We've had 12% earnings growth in the first half of the year. The S&P 500 is up about 16 or 17%. So most of that has been driven by earnings. And here we are stepping into the biggest week of the third quarter earnings.
How do you think it's all going to go down this week? Do we finish the week feeling even better?

host
Ben Snider

I think so. If we look at the mega-cap tech stocks, we have five of those magnificent seven reporting this week. In the first quarter, they grew earnings by 30%. In the second quarter, again 30%. Consensus estimates this quarter are just 14%. I think that's a low bar. We're going to clear that bar.
We just had news before you came up about Amazon reporting cuts at the corporate level of 30,000 jobs. This is part of a wave coming related to AI disruption. How do you think about that?

host
Ben Snider

We have a sense there's a wave coming but we don't know how quickly it will occur. AI could cause 6 or 7 percent US job displacement, which is quite a lot. But it matters if that happens over a year or a decade. Most announcements are about reduced hiring rather than large layoffs, though Amazon may be an exception. This suggests a gradual and smooth labor market transition.
Do you think the Fed will be more engaged, possibly leading to more cuts than less?

host
Ben Snider

There's a fine line. Too much labor market displacement might suggest more Fed easing than currently priced, which is negative for growth from an equity perspective. So far, the Fed has said it plans to ease a little and stay on course, including a likely cut this week.
You and David Cohen have a Nasdaq 100 target of 7200 by mid-2026. What could go wrong?

host
Ben Snider

First, as an equity investor, one should focus on what could go right. Second, institutional positioning is surprisingly constrained despite the market being at an all-time high with high PE multiples. Hedge fund leverage is low and mutual funds have been selling lately, indicating skepticism which could allow the market to keep climbing.

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