JPMorgan Raises Year-End S&P 500 Target to 8,000 From 7,800

JPMorgan raised its year-end target for the S&P 500 to 8,000 from 7,800, citing strong corporate earnings and rising confidence that revenue growth will accelerate as large hyperscalers increase spending on artificial intelligence. The new target implies about 3.1% upside from Friday's close of 7,757.64.

In a note dated Aug. 10, the bank said cloud growth should remain steady as rising order backlogs convert into revenue, helping justify increased AI spending. That should strengthen companies' order coverage and ease concerns over return on invested capital, or ROIC.

JPMorgan also lifted its earnings-per-share forecasts for S&P 500 companies to $365 for 2026 and $420 for 2027, from previous estimates of $350 and $390, respectively. That represents increases of roughly 10% for each year.

At least seven Wall Street firms expect the S&P 500 to reach 8,000 by the end of 2026, Reuters reported, highlighting a broader spread of bullish forecasts.

LSEG data cited by Reuters showed that 85.1% of the 436 S&P 500 companies that had reported June-quarter earnings by Friday morning beat Wall Street estimates. That was above the long-term average of 68% since 1994.

JPMorgan said the benefits of higher AI spending became clear in the second quarter, particularly at Google, Amazon and Microsoft. Their shares rose after earnings as investors grew more comfortable with returns on AI investment, aided by strong cloud growth, expanding backlogs and improved cash-flow outlooks.

The bank maintained its target valuation multiple for S&P 500 companies at about 20 times, citing future interest-rate increases, geopolitical risks, and heavy issuance of stocks and bonds.

The S&P 500 has gained 13.3% so far this year on optimism about AI. Still, the oil market and shipping industry remain under pressure amid uncertainty over the reopening of the Strait of Hormuz and talks involving Iran, Oman and the US.

Kim Jung-a, contributing reporter, Hankyung.com, kja@hankyung.com