Barclays lifts S&P 500 index's year-end target to 7,950 on strong earnings
The revised target is about 3.6% higher than the index’s last close
Barclays has raised its year-end target for the S&P 500 index to 7,950, marking a 3.6% increase from its previous estimate of 7,800. This adjustment comes after a strong earnings season driven by technology firms. Barclays envisions the benchmark reaching 8,800 points by the end of 2027. The brokerage highlights that US corporate earnings have consistently surpassed Wall Street expectations in the second quarter, with 86% of the 492 S&P 500 companies reporting results outperforming analysts' estimates.
This outperformance is notably higher than the long-term average of 67.5%. Barclays attributes this positive trend to AI investment and robust economic activity. However, the brokerage remains cautious about valuations due to concerns regarding the sustainability of AI spending, persistent inflation, geopolitical uncertainties, and a more aggressive interest rate outlook.
Despite these reservations, the benchmark index has still seen a 12.1% year-to-date gain. Barclays also raised its 2026 earnings-per-share forecast for the S&P 500 to US$365 from US$337. Meanwhile, HSBC has also lifted its year-end target, citing strong corporate earnings and ongoing investments in AI infrastructure as key factors to sustain the rising index trend.
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