Earnings growth driven by the artificial intelligence buildout is expected to push the S&P 500 above 8,000 in 2026, according to Citi, which lifted its year‑end target to 8,100—a gain of more than 9.5% from the recent close. The prior target was 7,700. Strategist Scott Chronert forecasts earnings of $350 per share in 2026 and $400 in 2027. He attributes the momentum to AI‑driven tailwinds that are sparking an episodic surge across related sectors, expressing strong confidence in continued earnings beats through year‑end. While Q1 earnings surprises were unusually high, Chronert does not expect such magnitude to persist, but anticipates a persistently higher rate of positive earnings surprises in upcoming quarters. He notes that earnings will become the primary driver of the index, surpassing valuation expansion. Volatility may arise from geopolitical tensions such as the U.S.–Iran conflict, rising inflation, and uncertainty over interest‑rate paths, yet AI spending remains the focal point for investors. Despite concerns about an AI bubble, Chronert argues the market is still in the middle of its growth cycle; trailing and forward price‑to‑earnings ratios are expected to moderate, placing greater emphasis on earnings growth to sustain index gains.
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