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.