A Wall Street analyst has outlined the chances of the S&P 500 climbing to 9,000 by 2026, amid ongoing debate over whether the artificial intelligence (AI) boom is fueling a lasting rally or an emerging bubble.
Notably, the benchmark index has notched multiple record highs in 2025, led by technology stocks. At press time, the S&P 500 stood at 6,664, up nearly 15% year-to-date.
Regarding the future outlook, Evercore ISI strategist Julian Emanuel sees only a 25% probability that the index overshoots the firm’s 2026 target of 7,750 to reach 9,000.
While a recent client survey showed 67% believe a bubble is forming, Emanuel argued that AI adoption remains in its early stages and markets are far from the extremes of the Dot-com era.
He compared today’s environment to the mid-1990s, when internet adoption fueled years of gains despite overvaluation concerns. With AI uptake estimated at just 25%, Emanuel believes the rally still has room to run.
At the same time, Evercore expects volatility along the way, similar to the pullbacks of the 1990s bull market. The firm continues to back the “Magnificent 7” technology leaders at the center of the AI trade and recommends using options strategies to capture upside while managing risk.
Impact of Fed rate cut on S&P 500
Attention has also shifted to the long-term outlook following the Federal Reserve’s interest rate cut and expectations of further easing. This has prompted differing views from other major strategists.
In this regard, Goldman Sachs on September 22 raised its 12-month target for the S&P 500 to 7,200, pointing to stronger-than-expected corporate earnings in 2025.
While acknowledging that stocks remain historically expensive, the bank argued that equities typically perform well during Federal Reserve rate-cutting cycles when no recession is underway.
Goldman recommended investors’ position in companies with floating-rate debt, which stand to gain as borrowing costs decline, and in small- and mid-cap stocks that are particularly sensitive to an accelerating economy.
As reported by Finbold, Morgan Stanley’s Michael Wilson struck a cautiously optimistic tone, projecting the S&P 500 could climb to 7,200 by mid-2026, urging investors to use short-term pullbacks as buying opportunities.
JPMorgan’s Mislav Matejka warned that equities may face renewed downside once the Fed continues easing, with valuations likely to be reassessed amid weak economic data.
On the other hand, Oppenheimer’s John Stoltzfus took a middle ground, expecting a brief dip after the rate decision but maintaining confidence in the economy’s underlying strength.
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