Investment banks have begun publishing their forecasts for 2026, and the boldest of them predict an increase in the S&P 500 index to 8,000 points.
The main driver remains the boom in artificial intelligence, which continues to reshape the economy and financial markets, according to YahooFinance.
On Tuesday, Deutsche Bank set the index's target level for the end of 2026 at 8,000 points (the current level is about 6,812). The bank's analysts expect returns of 15%, supported by capital inflows, share repurchases and rising corporate profits.
Deutsche Bank's forecast is at the upper limit of Wall Street expectations, but other players are also optimistic. So, Morgan Stanley and Wells Fargo forecast 7,800 points, JPMorgan and HSBC — 7,500.
Despite the optimism, experts warn about the risks. Wells Fargo fears that the rally could turn into a bubble. The market is becoming increasingly dependent on the "wealth effect" in a K-shaped economy where the rich get richer and the poor get poorer.
"A bear market can trigger an economic downturn that neither the Fed nor the government can afford, especially before the midterm elections," the bank's strategists note.
At the same time, JPMorgan strategist Dubravko Lakos-Bouyas believes that the current high multipliers are justified.:
"Despite concerns about the AI bubble, the market is correctly assessing excess profit growth, a boom in AI capital expenditures, and fiscal policy easing."
The bank forecasts profit growth of 13-15% in the next two years, believing that investors still underestimate the benefits of deregulation and productivity growth due to AI.