An investment banking advisory firm says artificial intelligence could fuel the strongest equity rally in decades, pushing the S&P 500 to new all-time highs.
In a new investor note, analysts at Evercore ISI, including chief equity and quantitative strategist Julian Emanuel, unveil a bull case target of 9,000 for the S&P 500, reports Bloomberg.
Evercore says investor enthusiasm for AI is already transforming valuations and could propel the S&P 500 far beyond current levels. The analysts note that if confidence spreads across businesses, consumers, and markets, the stock market index could hit the massive price target as early as next year.
“AI is ‘bigger’ than the Internet. In three years, its effect has touched all parts of society and industry, even as adoption only begins to inflect.”
The firm’s base case is also aggressive, calling for the S&P 500 to reach 7,750 by the end of 2026. That implies a roughly 20% rally from recent levels, following a nearly 10% gain this year. Emanuel says the advance is part of “a technological revolution lifting stocks, multiples and society to new heights.”
Meanwhile, Evercore ISI warns that in its bear case, the S&P 500 could tumble to 5,000 points if inflation stays high and economic growth is subdued.
As for the firm’s year-end target, Emanuel says he sees the index ending the year at 6,250 points, below last week’s close of 6,460.
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