HSBC has lifted its year‑end S&P 500 target to 7,650, pointing to a 29% surge in first‑quarter earnings that has reinforced confidence in US equities despite rising oil prices and Middle East tensions. The new level suggests about 3.4% upside from the index’s recent 7,398.93, and the bank also raised its 2026 earnings‑per‑share estimate to about $325, corresponding to roughly 20% growth. The upgrade underscores a market that is still riding the strength of corporate America, especially megacap technology names that are direct beneficiaries of the artificial intelligence buildout.
Wedbush’s Dan Ives is even more aggressive, forecasting that the Nasdaq Composite will reach 30,000 within the next year. With the index at 26,347 – up 13% year‑to‑date – Ives argues the AI revolution is only in its early stages, describing the environment as a “memory super‑cycle” fueled by a 10‑to‑1 demand‑to‑supply ratio for high‑performance chips. He dismisses comparisons to the dot‑com bubble, noting that heavy spending on software, cybersecurity and power infrastructure validates the trend.
Ed Yardeni of Yardeni Research has also hiked his year‑end forecast, setting an 8,250 target for the S&P 500. His optimism rests on “phenomenal” earnings beats: 84% of S&P 500 companies have exceeded bottom‑line estimates this season, the highest rate since 2021, and the 25.6% year‑over‑year profit expansion is nearly four times the five‑year average. Yardeni emphasizes the resilience of the consumer and the economy, even as the White House warns that the Iran ceasefire is “on life‑support” and energy prices threaten margins.
Despite the geopolitical noise, the dominant narrative remains the AI‑driven earnings engine. Next week’s reports from Nvidia, Walmart, and Home Depot will serve as a litmus test for whether the rally can broaden beyond a narrow set of tech leaders. While skeptics like Paul Tudor Jones caution about potential valuation corrections, the prevailing sentiment on Wall Street is that the AI capital expenditure cycle has room to run, keeping the bull market intact for now.
