Wall Street banking giant Citigroup has raised its S&P 500 2026 year-end target from 7,700 to 8,100, citing positive corporate earnings as well as growth in artificial intelligence (AI).
The bank’s strategist, Scott Chronert, based the revised forecast on projected S&P 500 earnings per share (EPS) of $350 in 2026 and offered an initial estimate of $400 per share for 2027, according to a press release shared by Reuters on June 8.
According to the assessment, the S&P 500 target 2026 will depend largely on corporate profit growth rather than expanding valuations. For now, the new prediction implies about 10% upside from the last close at 7,383.
New S&P 500 target
The S&P 500 has gained nearly 8% year-to-date (YTD), and Citi’s upgrade suggests the bank is confident the index can continue growing in the following months.
As mentioned, a key driver behind the bullish outlook is the continued demand for AI-related investments. More precisely, Chronert noted that AI infrastructure spending is fueling a significant earnings expansion across technology and growth-oriented sectors. This, he added, has left growth stocks accounting for roughly 45% of the market’s earnings weight, up sharply from just 15% three decades ago.
Nonetheless, the bank admitted that it is far from certain that AI growth can continue beyond 2027. What’s more, the S&P 500 is facing some pressure following the latest U.S. nonfarm payrolls data released on Friday, June 5, which has renewed concerns that the Federal Reserve may keep monetary policy tighter for longer. Likewise, the index has broken several key technical support levels, meaning further downside in the coming weeks has gone up.
“Beyond 2027…we need to acknowledge some degree of deceleration (if not decline) in spending will eventually set up for an equity market hangover effect. But that is not currently in the line of sight,” the note said.
Ultimately, it appears that the bank is trying to balance optimism surrounding AI with persistent inflation concerns stemming from the ongoing Middle East tensions and not-so-favorable U.S. labor market data.
Wall Street is bullish on S&P 500
The index has received similar upgrades from other Wall Street firms in recent weeks. For example, the American banking giant Goldman Sachs has raised its own target from 7,600 to 8,000.
In addition, the bank also increased its EPS estimates to $340 for 2026 and $385 in 2027, slightly below those offered by Citi.
Just like Citi, though, Goldman pointed to earnings growth as one of S&P 500’s primary drivers this year, a trend it expects to continue in the coming months.
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