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LivestreamMenuJPMorgan is the latest Wall Street firm to raise its year-end S & P 500 target, now that the bulk of corporate earnings have been reported and appear to confirm a key tenet of the bull case — that the largest technology companies’ massive investments in artificial intelligence spending is justified. On Monday, JPM global head of market strategy Dubravko Lakos-Bujas said he expects the S & P 500 will end the year at 8,000, raising his target from 7,800 previously. The new target implies about a 3% gain from where the broad market index closed Friday, at 7,757.64. Second-quarter earnings season has been explosive. Of the 87% of S & P 500 companies that have reported thus far, 78% have beaten analyst’ earnings expectations, according to a JPMorgan note. And, the degree to which companies have topped estimates stands at about about 31%, as opposed to the roughly 9% average beat from the past four quarters, the bank said. Excluding non-recurring events, the magnitude of the average S & P 500 earnings surprise for the quarter is still about 11%. Concern should ease The billions spent developing AI has a been a focus for the market, but investor concern about returns on investment should start to ease, JPMorgan said. The most prominent companies that have begun to report AI profits are Alphabet , Amazon and Microsoft , where cloud growth, expanding backlogs and operating cash flow have improved, the bank said. Although free cash flow “is expected to remain negative in FY27 for most hyperscalers, demand and order coverage are improving relative to capex, as evidenced by rising backlog-to-capex and book-to-bill ratio,” Lakos-Bujas wrote Monday. “This suggests that monetization may start ramping faster than spending, which should support stronger future revenue growth and further alleviate concerns” return on invested capital, he said. The strategist revised his 2026 earnings estimate for the S & P 500 to $365, and his 2027 earnings estimate to $420, representing year-over-year earnings growth of 35% and 15%, respectively. The strategist also left his forward multiple unchanged at about 20x, because of the potential for higher interest rates, as well as continued geopolitical uncertainty. There will also be unprecedented levels of equity and debt supply that will need to be absorbed, he wrote. JPMorgan is not alone in raising its market target recently. Last week, CFRA raised its S & P 500 year-end objective to 8,050 , up from 7,400 originally. And last month, UBS raised its year-end target to 8,100 from 7,500. But the new target makes JPMorgan and the other firms among the most bullish on the Street, according to CNBC’s 2026 market strategist survey . On Monday, the S & P 500 was a little bit off its all-time high reached on Friday.Read More
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