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, with Wells Fargo becoming the latest bull.
Wells Fargo expects real gross domestic product (GDP) growth of 2.0% in 2025 and 2.3% in 2026 and has “become modestly more constructive on the outlook for economic growth.” Wells Fargo revised its S&P 500 estimates following upbeat consumer spending data, as well as expecting two additional rate cuts through the end of the year. “As this year ends and we move into and through 2026, we expect to see earnings and stock performance broaden to some extent beyond the seven stocks whose growth rates and stock performance have largely carried the SPX to a series of record highs,” Wells Fargo said.
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. Earlier this week, 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.