JPMorgan has raised its S&P 500 target for 2026 to 8,000 from 7,800, citing stronger-than-expected corporate earnings and growing evidence that artificial intelligence spending is translating into business results.
The new target implies roughly 3% upside from the index’s press-time level of 7,757 and places JPMorgan among the most bullish major Wall Street firms covering U.S. equities.
The forecast, issued by a team of strategists led by Dubravko Lakos-Bujas, follows a strong second-quarter earnings season, with 87% of S&P 500 companies having reported results.
JPMorgan said earnings growth remains broad-based across multiple sectors, supporting a more constructive outlook for the benchmark index.
Alongside the higher S&P 500 year-end target, JPMorgan raised its 2026 earnings-per-share estimate to $365, implying annual growth of 35% and exceeding the current Wall Street consensus of $358.
The bank also increased its 2027 earnings forecast to $420 per share, representing 15% growth.
According to the strategists, part of the earnings increase reflects gains from private-company stake valuations. Excluding those contributions, JPMorgan estimates normalized 2026 earnings would reach $347 per share, still up 28% year over year.
Despite the stronger earnings outlook, the bank maintained its valuation multiple at about 20 times forward earnings, citing higher interest rates, geopolitical risks, and continued equity and debt issuance.
Impact of AI investments
A key driver behind JPMorgan’s upgraded S&P 500 forecast is continued AI-related investment by large technology companies.
The bank said stronger cloud growth, expanding backlogs, and improving cash-flow visibility at major hyperscalers suggest that massive AI infrastructure spending is increasingly translating into commercial demand.
JPMorgan expects AI-related investment to account for more than half of the S&P 500’s estimated $1.5 trillion in capital expenditures this year.
Industry forecasts cited by the bank project AI capital spending will reach about $900 billion by the end of 2026, up 85% from a year earlier, before surpassing $1.2 trillion next year.
Cloud businesses continue to post strong growth, with Amazon Web Services, Microsoft Azure, and Google Cloud reporting robust expansion and rising backlogs, reinforcing investor confidence in the long-term earnings potential of AI infrastructure spending.
JPMorgan’s new 8,000 target matches Goldman Sachs’ forecast for the index. Citigroup remains slightly more bullish with an 8,100 target, while Yardeni Research projects the S&P 500 could reach 8,250 by year-end.
Across Wall Street, earnings growth rather than valuation expansion is increasingly viewed as the main driver of further upside for U.S. equities.
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