Goldman Sachs strategist Christian Mueller-Glissmann says the AI-driven earnings surprises that lifted stocks last season are unlikely to repeat, dimming hopes that results alone will fuel a major stock rally.

Last reporting period saw a cluster of positive surprises tied to artificial intelligence spending, which caught many investors off guard and provided a tailwind for equities. Mueller-Glissmann argues that the low bar that enabled those beats has largely been reset, making it harder for companies to exceed expectations by similar margins.

The implication is that the market will need fresh catalysts — such as clearer evidence of AI monetization, a shift in Federal Reserve policy, or a broadening of earnings momentum beyond mega-cap technology — to sustain upward momentum. Valuations in the sector already reflect considerable optimism, leaving limited room for disappointment.

For portfolio managers, the message is to diversify return drivers rather than lean on another wave of surprise-driven gains. The next leg of any rally will likely depend on fundamental execution and macroeconomic stability, not just the novelty of an AI narrative.