JPMorgan raised its year-end S&P 500 target to 8,000 from 7,800, while CFRA bumped its target to 8,050 and its 12-month view to 8,650 from 7,730. The moves come as the index sits near records, with JPMorgan's new target implying roughly 3% upside from Friday's close of 7,757.64.
The new targets
JPMorgan's strategists cited strong earnings and growing evidence that massive AI investment is translating into customer demand. They expect $365 in 2026 earnings per share, a 35% jump, while holding the valuation multiple flat at 20 times earnings. That's a bet on profit growth doing the heavy lifting rather than multiple expansion.
CFRA's Sam Stovall says strong earnings continue to support equities, but he's careful to flag that the rally may be nearing a peak. His 12-month target of 8,650 sits well above the Street's average near 7,854, so he's clearly not ready to call the top just yet.
Why the bulls are leaning in
The earnings picture is hard to ignore. Google Cloud grew 82% year over year, Microsoft Azure was up 43%, and Amazon Web Services climbed 37%. JPMorgan expects AI to soak up more than half of the index's $1.5 trillion in capital spending this year. That's a lot of cash flowing into data centers and chips, and so far the revenue is following.
Goldman Sachs sits at 8,000, Citi at 8,100, and Bank of America at 7,100. The spread between the most bullish and bearish calls is wide, which tells you the debate is far from settled.
The skeptics' checklist
Stovall points to rising margin debt, sticky inflation, and the possibility of further Federal Reserve tightening as risks. JPMorgan, for its part, expects the Fed to hold rates at 3.50% to 3.75% through 2026 and sees core PCE inflation near 3.4% by December. That's still above the Fed's target, so don't expect cuts anytime soon.
Hedging demand, measured by the one-month put-to-call skew, has fallen to a 16-month low — the lowest since President Trump's tariff retreat in 2025. That's a sign of complacency, and it's not the only one. The S&P 500 dividend yield dropped to a record-low 1.04%, far below its long-run average of 2.81%. Investors are paying up for growth, and they're not getting paid to wait.
Michael Burry has issued a 1987-style crash warning as the index hits records. He's been early before, but the warning adds to a growing list of concerns: heavy share and debt issuance, Strait of Hormuz oil frictions, and weak September seasonality.
What to watch
Bitcoin traded near $63,955, down 2% in a day, while the S&P 500 eased 0.1%. The market's next real test comes with the Fed's September meeting, where the rate decision will signal whether the central bank sees inflation as contained. Until then, the bulls have the targets, and the bears have the tape.
