Elon Musk, the world's richest person, forecasts that the U.S. economy will enter a period of double-digit growth within the next 12 to 18 months, with applied artificial intelligence (AI) serving as the primary catalyst.
On Wednesday, Musk posted on X platform that if applied intelligence is considered a proxy for U.S. economic growth, "triple-digit growth could be achievable in about five years." His remarks coincided with strengthening U.S. economic data.
Third-quarter GDP grew at an annualized rate of 4.3%, marking the fastest pace in two years. Federal Reserve officials have identified AI data center investments as a key factor in their upward revision of 2026 growth expectations.
Meanwhile, major Wall Street institutions have also raised their market performance forecasts. Morgan Stanley predicts the S&P 500 will deliver double-digit percentage gains by 2026. Goldman Sachs asserts that global equities are entering an "optimism phase" of the bull market, with earnings continuing to support the rally in 2026. Including dividends, total returns could reach 15%.
AI Investments Fuel Growth Expectations Fed officials have grouped AI data center spending alongside consumer spending and fiscal stimulus as multiple drivers underpinning stronger 2026 growth projections.
Analysts believe widespread AI adoption is expected to significantly boost productivity and innovation, propelling the U.S. economy into a higher growth range (10% or above).
Musk has repeatedly linked economic expansion to what he calls "applied intelligence" across his ventures.
At Tesla Motors, he emphasized developing next-gen AI chips to enhance autonomous driving systems. SpaceX continues expanding its Starlink satellite network and launch capabilities to meet rising global demand for data connectivity.
Strong Q3 GDP Data The delayed Q3 GDP report, released after the government shutdown, showed the U.S. economy expanding at its quickest rate in two years (4.3% annualized), fueled by robust consumer spending and stable business policies. Despite December’s dip in consumer confidence and flat November factory output, resilience persisted through mid-year. Government and central bank data highlight enduring consumer strength and sustained corporate investment.
Goldman Sachs: 13% Global Equity Returns in 2026 For 2026, Goldman’s core advice is "diversification is mandatory."
Based on 50+ years of U.S. market cycle research, Goldman notes equities typically evolve through four phases: Despair, Hope, Growth, and Optimism. Markets are now in the final "Optimism" stage. Its model forecasts 13% price returns (15% with dividends) for global equities in USD terms.
With markets currently dominated by U.S. mega-caps and tech, this concentration presents both momentum and risk. Goldman recommends:
1. Stay Invested : The bull market isn’t over.
2. Cross-Regional Diversification : Increase exposure to emerging markets (EM).
3. Style Diversification : Blend growth and value stocks. Outside the U.S., value often outperforms as sectors like financials and mining transition from "value traps" to value creators.
4. Sector Diversification : Capitalize on tech-driven capex by investing in "old economy" infrastructure benefiting from AI.
5. Seek Alpha : Exploit potentially low stock correlations for individual opportunities.
