Julian Emanuel, Chief Equity and Quantitative Strategist at Evercore ISI, stated that driven by the artificial intelligence (AI) boom, the U.S. stock market could rise another 20% by the end of 2026. In a report, Julian Emanuel said the S&P 500 is expected to reach 7,750 points by the end of next year, noting that "technological revolutions elevate stocks, multiples, and society to new heights." This implies a 20% increase from last Friday's closing level for the U.S. stock benchmark index, which has already risen nearly 10% year-to-date.
According to data compiled by Bloomberg, Julian Emanuel's 2026 target for the S&P 500 is the highest on Wall Street so far. The strategist wrote that the impact of AI means earnings have consistently exceeded expectations, with the second quarter achieving "double-digit growth and broad upside surprises despite tariff/policy uncertainties."
Benefiting from strong corporate earnings and potential interest rate cut expectations, the U.S. stock market has risen for four consecutive months and repeatedly hit new highs. This rally has been primarily led by tech stocks, with NVIDIA (NVDA.US), Meta (META.US), and Microsoft (MSFT.US) all seeing at least 20% gains year-to-date.
Strategists at Evercore ISI said, "AI is 'bigger' than the internet. In three years, its impact has touched all aspects of society and industry, even as adoption is just entering the acceleration phase." However, the strategists also acknowledged significant uncertainty about next year's outcomes. In an optimistic scenario, if consumer, corporate, and investor confidence is fully unleashed, the S&P 500 could reach 9,000 points. In a pessimistic scenario, if inflation remains high and economic growth is sluggish, the index could fall to 5,000 points.
Additionally, Julian Emanuel raised his target for the S&P 500 by the end of 2025, forecasting the index to close this year at 6,250 points—below last Friday's closing level of 6,460 points and slightly lower than the average strategist target of 6,370 points tracked by Bloomberg.
