American banking giant Goldman Sachs has raised its 2026 year-end target for the S&P 500 as the index trades near record highs.
The index closed Tuesday’s session at 7,519, up nearly 10% year-to-date.
Notably, Goldman Sachs raised its target for the index to 8,000 from 7,600, implying upside of about 6.4% from the latest close.
The bank also increased its earnings-per-share estimates for the S&P 500 to $340 for 2026, representing annual growth of 24%, while projecting earnings to rise further to $385 in 2027, an additional 13% increase.
According to Goldman, earnings growth has been the primary driver of the S&P 500’s gains this year, a trend it expects to continue in the coming months.
The bank noted that companies tied to AI infrastructure are expected to account for roughly half of the index’s earnings growth in 2026.
At the same time, Goldman acknowledged that weak consumer spending and elevated costs remain potential risks for equities. However, the bank believes sustained investment in AI infrastructure and semiconductor technologies will continue supporting earnings momentum across the market.
The brokerage also highlighted that semiconductor companies central to the AI infrastructure buildout have recently outperformed their forward earnings growth, even as overall S&P 500 earnings estimates have climbed faster than the index itself.
Wall Street bullish on S&P 500
With the index reaching fresh highs in recent months, several analysts have also raised their forecasts. For instance, Morgan Stanley lifted its target to around 8,000, citing a “new bull market” supported by policy tailwinds, the end of a rolling recession earlier this year, and strong earnings momentum into 2026.
Deutsche Bank also set a target of 8,000, driven by expectations of mid-teens returns from stronger investor inflows, share buybacks, and earnings growth broadening beyond the largest technology stocks.
JPMorgan is maintaining a base target near 7,600, based on higher earnings expectations fueled by the AI supercycle delivering above-trend profit growth of 13% to 15%, with potential for the index to reach 8,000 in a bullish scenario if the Federal Reserve delivers more aggressive rate cuts amid easing geopolitical tensions.
Meanwhile, independent strategist Ed Yardeni raised his forecast to a Street-high 8,250, reflecting upgraded expectations for corporate profits and an earnings-led rally, with forward EPS now projected at around $375.
Overall, strategist consensus broadly clusters in the 7,600 to 7,800 range, implying roughly 6% to 12% upside from recent levels around 7,500. Analysts continue to point to accelerating earnings growth in 2026 and ongoing AI infrastructure spending as key long-term tailwinds, alongside a resilient U.S. economy.
Despite the bullish revisions, strategists continue to warn about elevated valuations, geopolitical risks in the Middle East, trade policy uncertainty, and the possibility of renewed inflation pressures.
