JPMorgan doubles down on S&P 500 target for one key reason

The S&P 500 mightiness not beryllium done climbing.

Elyse Ausenbaugh, caput of concern strategy astatine JPMorgan Wealth Management, doubled down connected the bank’s S&P 500 target, forecasting a surge implicit 8,000 successful a bullish 2026 scenario, a CNBC interrogation revealed.

That marks an eye-catching four consecutive years of double-digit returns, a feat that has lone happened four times successful the past 100 years.

For perspective, here’s a look astatine the S&P 500’s year-end closes implicit the past 5 years, on with the year-over-year changes.

• 2020: 3,756.07 (+16.3% twelvemonth implicit year)

• 2021: 4,766.18 (+26.9% YoY)

• 2022: 3,839.50 (-19.4% YoY)

• 2023: 4,769.83 (+24.2% YoY)

• 2024: 5,881.63 (+23.3% YoY)

• 2025: 6,845.50 (+16.4% YoY)
  Source: Federal Reserve Bank of St. Louis, FRED Economic Data

If you haven’t been sleeping nether a stone for the past 3 years, you cognize the banal marketplace has been connected a tear, acknowledgment to AI.

Though the AI tailwind hasn’t been blowing arsenic hard arsenic it was, Ausenbaugh is inactive buying into the monolithic AI spending narrative.

That perspective, though, runs antagonistic to Bank of America expert Michael Hartnett’s caller informing astir the banal market’s constrictive marketplace leadership.

In fact, Hartnett argued that the monolithic AI roar is dragging the biggest tech giants into a importantly costlier spending cycle.

Still, legendary contrarian investors specified arsenic Cathie Wood are leaning into the pullback and proceed to bargain the dip successful Big Tech stocks.

Ausenbaugh believes successful the "structural buildout" communicative with AI, tying a planetary capex question to the technology, on with information priorities that prolong net momentum.

• S&P 500 (latest adjacent astatine 6,941.47):YTD +1.4%, 6-month +7.7%, 1-year +14.4% (price return, calculated from anterior closes)
  Barclays: 7,400 (+6.6%) JPMorgan: 7,500 (+8.0%) Goldman Sachs: 7,600 (+9.5%) Citigroup: 7,700 (+10.9%) Morgan Stanley: 7,800 (+12.4%) Deutsche Bank: 8.000 (+15.2%) Source: AP News, Reuters

The halfway motor driving stocks has efficaciously shifted, Ausenbaugh told CNBC.

So successful essence, this isn’t a rally that’s overly babelike connected the adjacent payrolls people oregon user retail income numbers.

Speaking of consumers, Bank of America CEO Brian Moynihan said markets are overreacting to the comparatively anemic December retail income report, pointing to healthier numbers being seen successful mid-February.

Related: Amazon delivers a jaw-dropper that changes the AMZN conversation

Though labour information and complaint cuts stay important, the bigger unit astatine play astatine this constituent is simply a durable planetary AI concern cycle.