Analysts on Wall Street are upping their price forecasts for the S&P 500 index (^GSPC) ahead of the upcoming Q3 earnings season. Most of the biggest companies on the index are set to share their latest earnings reports this month. Strategists from numerous firms are revising their price projections for the index, suggesting that the reports will show “fundamental strength” behind the index and send it higher.
Ed Yardeni, veteran market watcher and president of Yardeni Research, raised his S&P 500 target back to 7,000. Meanwhile, Evercore ISI’s Julian Emanuel echoed that view, keeping a base-case target of 7,750 for 2026. The latter went on to also add a 30% chance of a “bubble scenario” that could see the S&P 500 hit 9,000 by the end of next year, driven by accelerating capital markets and continued AI investments. Several big players featured in the index have ramped up their investments in AI, including Alphabet (GOOGL), Amazon (AMZN) and Apple (AAPL).
Also Read: Strategy (MSTR) Climbs as BTC Holdings Appreciate $3.9B
Despite mounting concerns over the government shutdown and fresh warnings of an AI “bubble,” strategists across Wall Street say there’s still upside for US equities heading into year-end. They credit the AI boom and potential positive earnings report for the S&P 500 index revision. On Monday, the S&P 500 and Nasdaq saw a boost from AMD jumping more than 20% after the company reached a deal with Sam Altman’s OpenAI. Year-to-date, the former is up 14%.
According to DataTrek Research, the S&P 500 is trading at about 25 times expected earnings for this year, a level the firm said “reflects complete confidence (and then some)” that profits will meet expectations. That implies earnings will climb 13% next year and another 10% in 2027.