JPMorgan Raises S&P 500 Target to 8,000 as AI Spending Begins Converting to Revenue Growth

US Stock Market: JP Morgan raises S&P 500 year-end target to 8,000 on AI, earnings optimism

J.P. Morgan raised its S&P 500 year-end target to 8,000, citing stronger corporate earnings and growing confidence in AI investments. The brokerage also raised its 2026 and 2027 earnings forecasts, while maintaining a 20-times valuation multiple amid risks from higher rates and geopolitical uncertainty. J.P. Morgan raised its year-end target for the S&P 500 index to 8,000 from 7,800 on Monday, citing expectations of solid corporate earnings and growing confidence that artificial intelligence investments by large technology companies will translate into faster revenue growth, Reuters reported. The new target represents about 3.1% upside from the S&P 500's latest close of 7,757.64 and adds to a growing number of bullish forecasts. At least seven brokerages now expect the benchmark index to reach 8,000 by the end of 2026. US MarketsPowered By As on 11 Aug 2026, 01:30 AM IST S&P 500 Top Gainers Datadog260.78(11.48%) APA41.02(9.01%) Marathon Petroleum320.32(7.42%) Akamai Technologies117.65(6.43%) Gainers" S&P 500 Top Losers Coterra Energy32.56(-8.62%) Verisk Analytics181.18(-5.55%) Corning157.76(-4.78%) Southwest Airlines44.90(-4.57%) Losers" J.P. Morgan also raised its earnings-per-share forecast for S&P 500 companies to $365 for 2026 from $350 previously, while its 2027 estimate was increased to $420 from $390. According to Reuters, the brokerage said rising AI investments were becoming more clearly reflected in second-quarter results, particularly at Google, Amazon and Microsoft. Strong cloud growth, expanding order backlogs and improved visibility into cash flows have helped ease concerns among investors over the returns generated by heavy AI spending. The brokerage expects elevated backlogs to convert into recognized revenue, supporting continued cloud growth and strengthening the case for increased AI capital expenditure. It also sees improving order coverage as helping to address concerns over returns on invested capital. The upbeat outlook comes as corporate earnings continue to exceed expectations. Of the 436 S&P 500 companies that had reported their June-quarter results through Friday morning, 85.1% had beaten analyst estimates, according to LSEG data. That compares with a long-term average of 68% since 1994. Despite raising its index target, J.P. Morgan kept its forward valuation multiple assumption at around 20 times. The brokerage cited higher interest rates, geopolitical risks and a large pipeline of equity and debt issuance as factors that could constrain further expansion in valuations. The S&P 500 has gained 13.3% so far this year, supported by optimism around AI and resilient corporate earnings. However, markets remain sensitive to geopolitical developments, with uncertainty surrounding the reopening of the Strait of Hormuz and diplomatic talks involving Iran, Oman and the United States continuing to weigh on oil prices and global shipping conditions, Reuters reported. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

S&P 500 Nears Wall Street Target, JPMorgan Lifts To 8,000 - Amazon.com (NASDAQ:AMZN), Alphabet (NASDAQ:GO

The S&P 500 has just closed its best week since April, pushing the index close to where Wall Street broadly expected it to finish the year. The benchmark closed at a record 7,757.64, up 3.58% on the week, its strongest five days since April and roughly 1% under the average year-end forecast on the Street. Wall Street's average year-end target sits around 7,845, with nearly five months still left in 2026. JPMorgan has now raised the bar again. The Target Goes Up, The Valuation Doesn't Strategist Dubravko Lakos-Bujas lifted JPMorgan's 2026 year-end S&P 500 target to 8,000 from 7,800, implying 3.1% upside from Friday's close. It is the second increase in two months -- 7,600 to 7,800 came in June -- and roughly 800 points of upward revision since March, when the bank cut to 7,200 as Brent crude spiked and the Strait of Hormuz closed. The earnings estimates did all the work. JPMorgan raised its 2026 earnings-per-share forecast -- the profit the index generates per share of ownership -- to $365 from $350, or 35% growth, against a $358 consensus. The 2027 number went to $420 from $390. The forward multiple, meaning the price investors pay today for each dollar of profit expected next year, stayed exactly where it was at about 20 times. The bank cited higher-for-longer rates, geopolitical risk and heavy equity and debt supply still to be absorbed. JPMorgan described the earnings picture as "strong and broad-based across multiple sectors." The AI Spending Cycle Is Starting To Matter The biggest piece of the earnings story is artificial intelligence. JPMorgan says the latest earnings season is providing more evidence that the enormous capital spending cycle is beginning to translate into actual revenue growth. Cloud businesses are showing particularly strong momentum. Backlogs are also expanding. Google Cloud's backlog increased by $52 billion quarter over quarter to $514 billion, while Amazon's backlog reached $496 billion, up 36% sequentially and nearly 2.5 times higher than a year earlier. For JPMorgan, this provides an increasingly important signal: AI monetization may be accelerating faster than spending. And spending is already enormous. AI capex is expected to reach roughly $900 billion this year, up 85% year over year, and could exceed $1.2 trillion by the end of 2027. So How High Can The S&P 500 Go? The board, updated for Monday's revision: Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

JPMorgan hikes S&P 500 target as AI spending starts paying off

JPMorgan strategists raised their year-end target for the S&P 500 to 8,000 points on Monday, citing strong corporate earnings and clear signs that heavy spending on artificial intelligence is starting to pay off. The move marks the second increase in two months for the team led by Dubravko Lakos-Bujas. In June, the strategists lifted the forecast to 7,800 from 7,600. The new target implies a roughly 3% upside from Friday's close of 7,757.64. The S&P 500 tracks 500 of the largest U.S. publicly traded companies and serves as a key benchmark for the broader stock market. It recently reclaimed record highs after companies reported robust results. Strategists pointed to second-quarter earnings as the main driver. Corporate profits jumped 32% in one of the strongest quarterly advances on record. Nearly four in five companies that reported results beat earnings expectations, and about 73% topped revenue forecasts, according to the bank's note. JPMorgan also raised its full-year earnings-per-share estimate for the index to $365, a 35% increase from the prior year. The bank projects $420 for 2027. The strategists highlighted progress among the so-called AI hyperscalers, which are the large technology firms that build and operate vast cloud computing networks. Alphabet Inc., Amazon.com Inc. and Microsoft Corp. all showed stronger cloud growth and larger order backlogs. "As elevated backlogs convert into recognized revenue, cloud growth should remain well supported, helping validate rising AI capex," the JPMorgan analysts wrote. "Across hyperscalers, demand indicators remain high and rising." JPMorgan expects artificial intelligence-related spending to make up well over half of the $1.5 trillion in total capital expenditures planned by S&P 500 companies this year. That share is likely to grow further. The bank said the latest results reduce concerns about returns on the massive investments these companies have made. Monetization of AI spending appears to be accelerating faster than the outlays themselves, which should support stronger future revenue growth. The 8,000 target sits slightly above the average forecast of 7,845 from 20 strategists surveyed by Bloomberg. Other major banks, including Goldman Sachs Group Inc., Citigroup Inc. and Deutsche Bank AG, have also issued bullish outlooks for US equities this year. The S&P 500 has climbed more than 13% so far in 2026. Stocks rose last week after a weaker-than-expected jobs report raised hopes that the Federal Reserve might delay any further interest-rate increases. JPMorgan's latest call arrives as investors continue to focus on whether the enormous sums poured into artificial intelligence will generate lasting profits. The strategists argue the early evidence from cloud demand and backlogs supports their more optimistic stance. The bank's revised outlook places it among the more constructive voices on Wall Street for the remainder of the year. Capex, or capital expenditures, refers to the money companies spend to buy, maintain or upgrade long-term assets such as servers, data centers and software.