JPMorgan becomes the latest Wall Street bank to move its S&P 500 target to an even 8,000.
JPMorgan has lifted its year-end target for the S&P 500 to 8,000, citing a strong second-quarter earnings season.
With 87% of the stock index's companies having already reported, results have proved strong across a number of industries, strategists at the investment bank, led by Dubravko Lakos-Bujas, global head of markets strategy, wrote in a note on Monday. This backdrop supported JPMorgan's decision to raise its S&P 500 SPX price target for the end of the year from 7,800 to 8,000.
JPMorgan's 8,000 call for the S&P 500 puts it on par with several other Wall Street banks, including Goldman Sachs.
The strategists also increased their guidance for earnings per share to $365 in 2026, representing a 35% boost compared to last year, and $420 for 2027, which would be a 15% rise versus this year's estimate.
When the reporting season first kicked off, they said that investors' main focus would still be capital expenditure outlooks among artificial-intelligence hyperscalers, with more interest in evidence of returns on those investments into the technology. The strategists noted they saw hints of this trend across Alphabet $(GOOGL)$, which owns Google, Amazon (AMZN) and Microsoft $(MSFT)$, where investors rewarded these stocks on improved cash flow visibility, robust cloud growth and backlog expansion.
While free cash flow is forecast to remain negative next year for most hyperscalers, demand from customers and contracted orders are improving in relation to spending on AI, they said.
"This suggests that monetization may start ramping faster than spending, which should support stronger future revenue growth and further alleviate concerns about ROIC [return on invested capital]," the strategists wrote.
The revised target comes as the S&P 500 closed at a record high on Friday, advancing to 7,758 on weaker-than-expected payrolls data for July - which casts doubt over an interest-rate hike by the Federal Reserve in September.
According to JPMorgan, almost four in five of the index's constituents that have posted results beat on earnings while 73% surpassed revenue forecasts.
-Nora Redmond